• by Gavin O'Malley  @mp_gavin, January 14, 2008

Online video technology company VideoEgg has secured new partnerships to expand the distribution of its invitation-based video ad network.

The addition of three popular content-sharing communities--Metacafe, iMeem, and Buzznet--increases VideoEgg's network by 50 million unique users, along with its exposure to social video-sharing communities.

"These sites are the new MTVs," said Matt Sanchez, CEO of VideoEgg. "iMeem, Metacafe and Buzznet are influential media brands with great momentum."

The partnerships, according to Sanchez, were facilitated by enhancements to VideoEgg's Eggnetwork, which the company launched in late 2006 for advertisers to place ads in user-generated video across social networks including Bebo, Dogster, hi5 and Tagged. The Eggnetwork ad platform now allows deployment of video advertising in any Flash environment.

"We're committed to delivering an exceptional entertainment experience, cultivating a vibrant community of independent producers, and building Metacafe into a global media company focused on short-form video," said Erick Hachenburg, CEO of Metacafe. "Incorporating in-video advertising from VideoEgg helps us meet each of these objectives."

Founded in 2005, VideoEgg has based its success on opt-in ad technology that stands in contrast to unpopular pre-roll video advertising. VideoEgg taps social networking data to aggregate appropriate audiences for advertisers. Targeting tools help advertisers identify and interact with relevant consumers.

In September, VideoEgg secured another $15 million in funding led by Focus Ventures. WPP, August Capital, and Maveron also contributed to the round.

Video networks in general are booming, with U.S. online video ad expenditures expected to total $775 million in 2007--up 89% from last year, according to market research firm eMarketer. Still, that number only represents about 4% of the projected 2007 U.S. online ad spend of $19.5 billion.

In April, WPP invested an unknown sum in VideoEgg with the intention of exploring its various ad-serving methods.

Rob Norman, CEO of GroupM Interaction, WPP's investment arm, said working with VideoEgg "provides a more focused way for our clients to participate in the growing world of social networks and user-generated content."