This week, we've seen quite a bit of buzz on monetizing online video. For example, Google, Inc. (Nasdaq: GOOG) announced that it has connected its AdSense system to YouTube videos (as I noted in a recent BloggingStocks.com post, it's pretty straightforward).

Well, another top video operator – blinkx – is also jumping into the fray. Basically, the company has launched a new system (called AdHoc) that provides a super-easy approach for converting videos to cash from your own site.

"A key difference is that you can embed videos from many sites," said Blinkx's cofounder and CTO, Suranga Chandratillake. "The sites include YouTube, MySpace and so. We split the revenues with Web publishers."

I tried it out – and it was a very smooth process (only requires working with two screens). What's more, the payment requires an email for a PayPal payment.

I also like the fact that Blinkx has a huge amount of diverse video content, which should help niche sites.

Click here to see an example of the video.

Back in the 1980s and 1990s, Microsoft (NASDAQ: MSFT) had always known its key focus: do whatever is possible to leverage the operating system.

Well, something similar is happening to Google (NASDAQ: GOOG). The company realizes that when it needs results, it should focus on its advertising machine.

So it's no surprise that the company is adding YouTube videos to the Google AdSense network. There will be both banner and text ads. What's more, it should be an additional source of income for Google's many Web publishers.

Actually, I tried out the system – and it is pretty easy to use (what Google service isn't?) You can see an example at the top left of this post.

What's more, I talked to Chase Norlin about it. He is the CEO and founder of Pixsy (a video search engine). According to him:

"Google acquired YouTube not necessarily for their huge destination site audience, but because they now have the ultimate media aggregation tool for consumer, semipro, and professional content providers. Once the licensing issues are sorted out, Google will have a solid weapon in the content distribution market via AdSense. The challenge, of course, will be to equal or exceed the existing monetization capabilities of the AdSense network."

Google (NASDAQ: GOOG) does not appear to have made any real money from YouTube, especially given how much the company earns from its search ad business. There are not a lot of advertisements on YouTube, but Google may have come upon a plan to get dollars out of the big video-sharing site another way.

Marketers using the Google ad network will be allowed to use certain YouTube videos in messages on the network's sites. According to The New York Times : "The Internet search giant is expected to introduce a service on Tuesday to allow Web sites in its ad network to embed relevant videos from some YouTube content creators. A Web site or blog specializing in hiking, for instance, might choose to embed hiking videos from YouTube."

Google will share ad revenue with the video content creators. The program is in its earliest stages and only 100 companies are set to offer their video as part of the program. Given the millions of videos on YouTube, that figure is likely to change soon.

The idea looks good on paper and it may work in practice, but it could have drawbacks. Much of the video on YouTube even from professional companies has mediocre picture quality, and there is no guarantee that adding video to a marketing message will make it any more compelling or effective than text ads.

Beyond those issues, it is a brilliant idea if it works.

Douglas A. McIntyre is a partner at 24/7 Wall St.

While television still rakes in billions, executives are getting nervous. What should be done about upstarts like Google (NASDAQ: GOOG)'s YouTube?

Well, in the case of CBS, the company is trying some experimentation. Its latest venture is called "EyeLab," according to a piece in the Wall Street Journal (subscription required)

CBS thinks that small videos and montages are the best approach for the Web. So, with EyeLab, CBS will create new content as well as splice in existing clips to develop cool videos. What's more, the video clips can also be effective vehicles to promote television shows, such as CSI and NUMB3RS.

To get some perspective on things, I talked to Chase Norlin, who operates Pixsy, which is an online video platform. According to him:

"This represents a step in the right direction but ultimately two more powerful forces will likely push CBS to tighten their strategy: 1) Getting short video content online doesn't equal audience. Consumers want access to everything in one place, which points to the success of YouTube; 2) The emerging trend of semipro and pro content created specifically for the web is going to be bigger than people realize. Efforts like Deca.TV, Vuguru, and others have the potential to grow rapidly if they can create breakout hits at low cost."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Apple, Inc. (NASDAQ: AAPL) was recently up $3.60 cents to $157.11.

AAPL is expected to report earnings per share (EPS) in mid-October. AAPL October option implied volatility is at 31 and November is at 39, below its 26-week average of 42 according to Track Data, suggesting decreasing price risk.

Google Inc. (NASDAQ: GOOG) was recently trading up $13.64 to $580.74.

GOOG is expected to report EPS on October 18th. GOOG October at the money 580 straddle is priced at $33.10. GOOG October option implied volatility of 31 is above its 26-week average of 27 according to Track Data, suggesting larger risk.

Volatility Index S&P 500 Options:

VIX decreased as Dow Industrials got above 14,000, down .59 to 17.39. The 10-day moving average was 18.78 according to Track Data.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Before starting KaDonk, Anders Heie worked at Nokia's Research and Development (NYSE: NOK) center in Copenhagen. He did some whiz-bang things there – and even has five US patents.

To carry out his projects, he had to work with people across the globe. The problem was that project management software was not up to snuff.

So why not start a company to improve things? Well, that's what he did.

To get some background on his venture, I had a chance to interview Anders:

How did it start?

They say most businesses start with a good idea. We started with a strong drive to create a company, any company. So two of my friends (Jari Niskala and Dipanshu Sharma) got together one evening and started a month long brainstorming process. What we realized after a while was that everyone we knew had the same problem; Project Management is a one-way street. What I mean by that is that in most organizations, project plans are created by the manager, shown to the participants, and then occasionally updated. Rarely, if ever, do participants in a project get to collaborate and take an active part in the planning and development phase of the plan. We were also acutely aware that the price of a team-wide Microsoft Project (NASDAQ: MSFT) deployment represented significant investments that most companies shy away from. Each license costs $500-$1500 depending on the solution selected.

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The management at CBS (NYSE: CBS) has caught onto something that should have been obvious. Most internet users don't watch full-length video on their PCs. It could be the small screen size or lack of remote control.

Part of the success of YouTube may be that the typical video on that site runs just a few minutes. It captures attention and keeps it, often until before the viewer gets bored. CBS is trying to adapt its video model to the reality that shorter clips appear to be watched much more often.

CBS will launch CBS EyeLab, a production operation that will put together short clips from a number of its shows and distribute them to a wide variety of websites. According to The Wall Street Journal "CBS says the EyeLab-produced clips will both entertain viewers and serve a marketing purpose."

Everyone already knew that most internet videos, especially on sites like YouTube, are watched by teenagers and young adults. People in this age group have the attention span of a house pet, so catering to their inability to stay focused for long is a brilliant idea. Especially since CBS is controlled by an owner who is past 80.

Douglas A. McIntyre is a partner at 24/7 Wall St.

In what I see increasing as a practice, music artist Prince has started a catfight with Google, Inc.'s (NASDAQ: GOOG) YouTube service and eBay, Inc. (NASDAQ: EBAY) over copyright violations dealing with unauthorized video content on YouTube and Prince-labeled clothing and shoes on eBay.

The constant battle copyright holders continue to have with the opening of content and commerce on the global web won't be over soon -- far from it. In fact, the web can be both the biggest threat and the most lucrative distribution tool for music and video artists. Defining the line between those, however, is so blurry no corrective lenses will ever be able to see it clearly.

Prince's issue here is the constant re-posting of his videos and other content on YouTube, even after his internet policing specialist successfully worked with YouTube officials taking down content that infringed on his copyright. In true YouTube fashion, more content is immediately uploaded and the circle starts all over again.

Then come the mousepads and shoes showing up on eBay with Prince's likeness. Same deal as with YouTube -- he just wants those items to be taken down for good. In an age where users are the ones responsible for uploading and listing infringing material -- not the hosting companies like eBay and YouTube -- how far does the responsibility go for both companies? That question still has no answer, and the web will continue upending the entertainment industry little by little.

True, Revver doesn't have the mega brand of Google Inc.'s (NASDAQ: GOOG) YouTube. However, the site has made some online video creators happy; that is, $1 million has been distributed to them.

You see, Revver allows its users to share in revenues generated from advertisements.

True, it's not a lot of money. But keep in mind that the online video market is still in the emerging stages.

Yahoo! Inc. (NASDAQ: YHOO) shares are gaining today on the heels of a couple of reports creating buzz around the company. First, a new report shows that more people than ever are spending more time than ever viewing video on the Internet (shocking, right?). Yahoo! trails Google's (NASDAQ: GOOG) YouTube for second place in market share, but still holds a significant portion of the market. Second, news came today from the WSJ that Yahoo is purchasing BuzzTracker, a popular news and editorial website, which could help Yahoo! gain market share in the online news and blogging sphere. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on YHOO.

After hitting a one-year high of $33.61 in May, the stock has dropped over the past four months, hitting a one-year low of $22.27 in late August. YHOO opened this morning at $23.69. So far today the stock has hit a low of $23.65 and a high of $24.43. As of 11:05, YHOO is trading at $24.43, up $0.71 (3.0%). The chart for YHOO looks neutral and improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just 5 weeks as long as YHOO is above $20 at October expiration. Yahoo! would have to fall by more than 18% before we would start to lose money.

YHOO hasn't been below $20 since late 2003 and has shown support around $23.50 recently. This trade could be risky if the company's earnings (due out 10/16) disappoint, but even if that happens, this position could be protected by the strong support the stock formed between $22 and $23 in August and early September.

Brent Archer is an options analyst and writer at Investors Observer.

It's hard to imagine that a single website could bring in so many visitors every day, but if we are to believe a recent report that analyzed metrics from web analysis firm ComScore, Google, Inc.'s (NASDAQ: GOOG) YouTube property is doing just that. According to JMP Securities, Google has accomplished quite a bit of growth from the July 2006 period to the July 2007 period. Should Yahoo, Inc. (NASDAQ: YHOO) and Microsoft Corp. (NASDAQ: MSFT) be worried at these Google growth numbers in the last year?

• Worldwide users up 20%
• U.S. users up 18% (now 22% of 552 million global total)
• Time spent on sites up 113%
• Page views up 56%
• Google Maps up 98% to 682 million, crushing Yahoo's 397 million (which is up 32%)

Those numbers, if validated, are hugely significant. Google's command of the time spent on the internet is increasing in a large way, and with the possible fact that Google's YouTube is commanding 28% of the total minutes spent on Google's global web properties, what is next? How about less revenue for starters? YouTube is not nearly as profitable as Google's cash-cow AdWords system, which brings in nearly all of Google's current barn-burning revenue every quarter. If more and more eyeballs shift to YouTube instead of Google Search, will Google's revenue suffer? Maybe.

Google has to figure out a way to make YouTube (and other public properties that are popular) profitable in a growing way. It's just now starting to experiment with this, adding ads to YouTube (to the chagrin of many customers) and it will inevitable try other ways to sift advertising revenue from the YouTube property. If it doesn't, a revenue crimp from the company may be a result in future quarters. Well, that is, if AdWords stops growing as a revenue source, which probably won't happen.

The New York Times [registration required] reports that Dave Stolte took his Apple Inc. (NASDAQ: AAPL) iPhone to Ireland and England in July and returned home to a little surprise -- a bill for $3,000.

Stolte's $3,000 phone bill was a result of unanticipated European roaming charges. Consider the case of mortgage consultant, Neil Dingman. Dingman used his iPhone only a few times on a European trip this summer and had expected to see just a small increase in his next bill for roaming charges. But he failed to turn off an iPhone feature that automatically checks e-mail. Thus his iPhone roamed over networks in Italy, Croatia and Malta more than 500 times. And he ended up with $852.31 in roaming charges.

But Stolte's story has a happy ending. Thanks to the posting of Stolte's bill on the Internet, AT&T Inc. (NYSE: T) went from giving him a $100 credit to full credit for that $3,000 iPhone bill. The lessons? Turn off the e-mail checking feature if you're out of the U.S. And if you get a ginormous iPhone bill -- post a complaint video on Google Inc.'s (NASDAQ: GOOG) YouTube.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the stocks mentioned.

Marié Digby is a big hit on Google's (NASDAQ: GOOG) YouTube. The 24-year-old's version of Rihanna's "Umbrella" is receiving airtime across the country, and her videos have been viewed over 2 million times. Last week, Walt Disney's (NYSE: DIS) Hollywood Records announced they'd signed her to a contract.

A nice rags to riches story, heh? Except it isn't. The Wall Street Journal stripped the everywoman cover off of Digby by revealing that she'd signed with the record company back in '05. Her YouTube-based PR campaign was carefully constructed by Hollywood Records to launch her in a way that would gain the cache of authenticity viewers grant to user-developed content.

Last year's controversial "LonelyGirl15" campaign demonstrated that some of the smartest people in America work in marketing. Noting the over-the-top success of that program, the ad industry is now awash with companies promising to launch viral campaigns of this nature, inspiring person-to-person emails for their product (you gotta see this!), and playing on the sense of ownership we have when we think we've discovered something authentic that others haven't.

The question here, I think, is one of transparency. Obviously, in light of the way the internet has evolved, we plebeians are willing to trade some of our time viewing advertising in return for otherwise free content. I'm not convinced, however, that we are willing to embrace stealth marketing, where the message is disguised such that we may not identify it as advertising.

The ruse of Digby's launch is minuscule in scope, but nonetheless causes me to trust what I see and read just a little less. And suspicion is an anathema to marketing.

Money keeps flooding into the online video sector. And the latest deal is a $34 million round for Dailymotion SA. Investors include Advent Venture Partners LLP and AGF Private Equity.

Interestingly enough, Dailymotion is based in Paris, France. And it's feeling the pressure from Google Inc. (NASDAQ: GOOG)'s YouTube (who isn't?).

Yet, Dailymotion still attracted 14.7 million unique visitors in July. Also, it looks like the company is going to rev up its partnerships.

I had a chance to talk to Chase Norlin, who is the CEO and founder of Pixsy (a multimedia search service). According to him:

"Get big or get out. That's the underlying reasoning behind these large online video financings. The entire space is going to become consolidated, which means that if you haven't hitched your dingy to a cruise ship you're going to be left out on the ocean to fend for yourself. Companies like Dailymotion may need to do acquisitions to bolster their presence in this category as the bigger players stake their turf and own larger portions of the online advertising pie."

If you want to check out more venture capital fundings, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Now that Google's (NASDAQ: GOOG) YouTube has set up a system to broadly market video advertising across its website, Wall Street analysts and the media have begun to engage in a debate about how much revenue the project will bring in. The spread of estimates is so wide that it opens the question of whether anyone can put up a fair estimate of the potential YouTube contribution.

Piper Jaffray analyst Gene Munster, who is known for being extremely bullish on many internet stocks, has a high-end revenue estimate for Google of $1.1 billion over the next year, according to TheStreet.com. That assumes an extremely high $40 cost per thousand pages sold and very wide acceptance of the video ad format that YouTube is offering. That would also mean that the project could be as much as 10% of Google's revenue, which would be an extraordinary benefit to shareholders.

UBS analyst Ben Schacter has come up with a much more modest contribution figure of $120 million for YouTube video ad revenue in 2008. The number assume very modest adoption of the YouTube video ad product. It would also mean that YouTube would not make a meaningful contribution to Google's revenue at all.

Hanging over all of this the the Viacom (NYSE: VIA) copyright-infringement lawsuit that is seeking $1 billion from Google for allowing the entertainment company's content to be posted at the video sharing site. It won't matter if the YouTube video ads bring in a billion dollars if it has to go right back out the door.

Douglas A. McIntyre is a partner at 24/7 Wall St.