The announcement claims SAY Media has an audience of 73 million social techies, 25.5 million moms, and 34 million sports enthusiasts. "Overall, SAY Media’s total audience will rank #1 in Blogs and #2 in Conversational Media, second only to Facebook," the company says. 

CEO Matt Sanchez (who has been CEO of VideoEgg) says, "Media has fundamentally changed and the new models can’t be ignored. Content consumption patterns are being driven by social connections and new types of content creators and aggregators from Huffington Post to Perez Hilton to Angry Birds have built passionate audiences and grown strong media businesses out of the change. SAY Media is a media company designed to meet these new challenges and help advertisers find systemic ways to garner attention."

"SAY Media continues Six Apart’s mission to make passionate creators successful," says Six Apart co-founder Mena Trott. "Whether on TypePad or another platform, developing a game or an application, the company will empower people to create great content and make money doing it. This acquisition marks a new beginning as we launch a modern media company centered on the creators, the content, and the audiences that are redefining media."

Financial terms of the acquisition have not been disclosed. 

According to Matthew Ingram at GigaOm, Six Apart CEO Chris Alden is stepping down, and Movable Type and TypePad will continue as products.

VideoEgg announced $1.5 million in ad revenues over 5 months, which is not much when you consider that they have over 150 top widgets. You can use targeted widgets and gadgets to push things that are already valuable, successful, unique, or interesting outside of the social networks, but traditional advertising is no good.

Rarely will you see the relevancy line up this well unless the gadget was created custom to match the item being advertised. But gadgets need to be extensions of brands, I don’t think they can become destinations themselves. And if they do, the network can always change their policies or clone them.

It is harsh doing business on someone else’s network. eBay, which has raised rates in the past, but never did much cleanup in over a decade, just announced their first quality score.

And if your offering is just basic data or something that is easy to replicate that is a zero sum game with those profits heading to Google, other market makers, or scammers arbitraging holes in the marketplace:

Data has this really weird quality. In economic terms data has an increasing marginal utility. Anyone who took Econ 101 knows that most physical objects have a decreasing marginal utility. When it is raining my first umbrella keeps me dry, a second may be handy if the first blows out, but a third is unlikely to be used. This is true of shirts, steaks, houses, of almost anything you can think of except data.

Data has the opposite characteristic. Each incremental point of data adds value to the ones you all ready have. It is easy to see this in the context of an advertising network. If the ad network knows that a user is female it can show more relevant ads. But, If the ad network knows that female’s age, it can do even better, and data about location, household income, and recent web sites visited all add value to the existing data points, making it possible to show more and more relevant ads.

Look at how Google expanded their local listings. How long until they own that category? By the time other aggregators want to opt out all of the data (and value) will have already been transferred to Google.

With all the value going to the aggregators who should sue who? Will that grow a broken business model?

The solution to market dilution is information pollution. Oops, wrong quote. What I meant to say was what Brian said here:

The replication process is quite intense and getting faster, which is why we need to focus on building trademark businesses (based on brand) instead of businesses dependent on copyright law.

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Although one hugely popular app on Facebook, the Scrabulous game, has been under attack from Scrabble’s trademark owners, VideoEgg has about 150 applications participating in its ad network. Since the product’s launch last August, $1.5 million in ad revenue "is a testament to VideoEgg’s ability to enable developers to monetize their content," company CEO Matt Sanchez said in a statement.

Facebook has been trying to broaden its appeal by opening a development platform to third party application developers. In turn, those developers sought options to monetize their apps, leading to other entrepreneurs looking for ways to serve that demand.

Considering the appeal of apps like Scrabulous and some others in VideoEgg’s ad network, Adam Ostrow at Mashable thinks the $1.5 million sounds a little low.

"The bottom line is that $1.5 million in revenue over 5 months for some of Facebook’s top applications simply does not seem like much, especially when you consider that MySpace is estimated to pull in $800 million of revenue this year," said Ostrow.

One forecast predicts significant growth for online video advertising, with eMarketer calling for a jump in that revenue from $775 million in 2007 to $4.3 billion by 2010. That could be a rising tide to lift VideoEgg and others over the next two years.

An official statement explains, "VideoEgg‘s Eggnetwork Advertising Platform (EAP) . . .  now allows deployment of video advertising in any Flash environment.  With EAP for Video, high-quality publishers can easily integrate VideoEgg’s invitation-based video advertising into their existing video platform – enabling sites to earn revenue by delivering unique in-video ads to their community."

So Metacafe, Imeem, and Buzznet can accommodate a rush of new advertisers without reassigning (or hiring) an equal number of programmers.  And VideoEgg gains access to an estimated 50 million unique users.  Not bad, eh?

Of course, any financial details related to the deal remain undisclosed, so if one party or another is getting the short straw, we aren’t likely to hear about it.  This seems like the sort of thing companies would willingly pay to achieve, however, so the details might be of little relevance, anyway.

Finally, we’ll note that the last time we wrote about VideoEgg, it had just earned $15 million in funding; this isn’t a bad trend for any company.

Here are today’s unique picks:

• It seems we weren’t the only ones scratching our heads at Ask.com’s weird TV commercials. The New York Times reveals that as part of IAC’s Ask.com shake-up, it fired ad agency Crispin Porter.
• Google disabled the AdSense account for IncrediMail and the company lost 33% of its stock value–yikes!
• Video advertising company VideoEgg has announced partnerships with Metacafe, imeem and Buzznet.
• MySpace is expected to make an announcement regarding “internet safety” this morning.

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Of course, this Series D round may have been in the pipeline for quite some time, but it’s fun to speculate about a cause-and-effect relationship.  One thing that probably wasn’t a cause, however, is the company’s other recent stint in the spotlight; NewTeeVee’s Liz Gannes explained, “We also picked up on a report last week that VideoEgg was juxtaposing consumer electronic ads onto footage of, for example, an Iraqi who appeared to be blowing himself up.”

That video’s description reads, “An Iraqi insurgent’s mortar blows up while in the launching tube.”  Make of the situation what you will; personally, I don’t feel a need to create picket signs.  VideoEgg’s advertising partners apparently weren’t upset, either, as a press release relating to the $15 million was able to list Universal Pictures, Discovery Networks, Nike, Nestlé, Electronic Arts, Unilever, and Ford among the company’s current friends.

Steven Bird, a general partner at Focus Ventures, could also be considered a pal – it was his company that led the round of funding.  “It’s all about the right mix to win in this market, which requires insight into the needs of marketers with innovative technology and a focus on rich media,” stated Bird.  “VideoEgg has made significant traction selling advertising solutions and is truly seen as an innovator in the ad world.”

As opposed to, say, YouTube?  The shots are getting more subtle, but it looks like VideoEgg is still having all sorts of fun over its competitor’s announcement.

Everyone’s claiming they invented YouTube’s ad style, the overlay ad. VideoEgg ran a banner on their site, saying, “We invented the video overlay ad about a year ago”. Of course, YouTube invented the embedded Flash player VideoEgg puts its videos inside of, Brightcove has been doing it for two years, and everybody takes good ideas from everybody else. After all, if it’s sucha good idea, why wouldn’t everybody use it?

Mary Meeker at Morgan Stanley got herself in an embarrassing situation, as she tried to predict YouTube’s future revenue growth and misunderstood the meaning of CPM. By mistaking CPM as “cost per impression” instead of “cost per thousand”, she overstated her analysis by a factor of a thousand, predicting $4.8 billion in revenue for YouTube next year (which, if it happens, I’d eat my hat).

Of course, since the new estimates were a mere $4.5 million, and analysts don’t make their money with tiny numbers, Mary tweaked the estimates so that even though they dropped a factor of a thousand, they were more optimistic than before in terms of percentages. As Henry Blodget explains, that’s called “backing into the numbers”, making them fit your expectations, and it’s why I don’t like analysts.

Anyone can predict anything based on making up numbers. Sure, you can do a lot of math to calculate what your guesses mean in the long term, but if you are still guessing, you aren’t bringing anything of value to the table. Unless analysts hold themselves to a higher level of proof than this, they should just sit back down and stop wasting our time.

A significantly large bunch of stupid YouTubers completely misunderstood the new system, proving once again the immaturity of the YouTube community, and their complete inabillity to RTFA. These users started threatening to boycott or just plain leave YouTube if Google started putting ads on their videos. Problem is, Google is only putting ads on videos it has a partnership with, and the complaining idiots are (a) too stupid to understand that and (b) too unimportant to have been offered partnerships.

If you really hate the ads, TubeStop supposedly never shows the ads, and it has the added bonus of turning off auto-play on YouTube videos. Vunderbar.

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Jeff Clavier – SoftTechVC

Invests his own money normally for under $1 million investments. Actually considers himself to be a bit more like an angel investor than a normal VC> Involved in Dogster, Userplane (which was profitably sold to AOL), and a new gaming platform.

Michael Eisenberg – Benchmark Capital

The overall Benchmark Capital funds manage a few billion dollars, with offices all over the world. Michael is based in Israel. They’ve Invested in ebay, Second Life, Metacafe, bebo, and Yelp.

David Kornik – August Capital

He’s the father of VC blogging with his blog Ventureblog.com.

August runs a 350M fund. They’ve invested in Six Apart, VideoEgg, and Technorati.

Josh Kopelman – First Round Capital

$50 million fund, with primariliy first seed round investments in the $250k-$500k range.
They’ve invested in StumbleUpon, del.icio.us, VideoEgg, Gigya, and Aggregate Knowledge.

Chris Moore – Redpoint Ventures

400M fund, invests in consumer internet. Invested in Ask Jeeves, Excite, Netflix, and Tivo in 1.0 phase. 3-4 years ago refocused to Myspace, Gaia, Buzznet, Right Media, Efficient Frontier, and Leadpoint.

The following is a paraphrasing off the conversation.

Arrington: When you invest small amounts, do you require a board seat? What’s the average first round size?

Dave: In almost every case we end up sitting on the board. It’s more about if it’s an opportunity to build a big business. Just because we have a big fund doesn’t mean we have to invest a ton of money to get involved.

Josh: We average about 350k over the past few years, we participate in later rounds as well.

Jeff: 200k to 1.5M. We act a little like angels.

Arrington: This isn’t going where I wanted it to. I wanted to pit Josh and Jeff against the big guys, so I’ll just force the conclusion I wanted. I was hoping to get at my thought that it’s harder on the big guys now because earlier investors like Josh and Jeff are getting into the best deals first and getting big chunks of the company and then you guys have to really compete later on to get in on the investment.

Jeff: We have participated with the big guys on lots of our deals.

Arrington: Again, the facts aren’t helping me.

Michael: Why would Techcrunch allow the facts to get in the way of a good story?

Arrington: Whatever your next startup is, it sucks.

Jeff: Hold on let me Twitter this!

There were quite a few laughs at this point, and everyone is having a good time giving Arrington a hard time about Techcrunch.

Arrington: When Joe Kraus built Excite years ago he needed to raise a lot of money. Now he raised a very tiny angel investment and got Jotspot started, then took a little more money later on when he needed to scale. What if there is no later round where you bigger guys get in?

Dave: If you make a lot of money off of very small initial investments, it’s fine! We’re paid on successful outcomes.

Arrington: So, if your fund is 350 million, and you have 5 partners, you make a certain amount of money from your management fees. But if you don’t invest all of that big fund, you will have less money under management and make less in management fees.

Dave: It’s not so much about how much we’re managing, it’s more about investing the right amount in companies that end up doing well.

Josh: My first company took 5 million to get a product shipped, second company took 2.5 million, my third took 750k. Now I’m funding companies for a couple hundred K. Now that doesn’t get to scale, you’ll still need more money down the road.

Chris: Mike, your theory has a point. If you’re looking at that $50M sale to Yahoo or Google, you can get there with less money. If you’re looking at the really big ones like YouTube and Myspace, you need more money to get there. The bigger funds have to be more careful and select the ones that can get big.

Arrington: Brand name angels are Josh and Jeff, if they want to invest people take it. The big funds have tons of competition for deals, Geni had a crazy valuation. What do you do?

Dave: Haven’t you heard of Value Add?

Arrington: Do you agree you’re getting squeezed from both ends? You have Jeff and Josh at one end and more competition from deals, on the other end the IPO window is shut.

Arrington: Jeff, I know the return on your portfolio because we’re friends. And it’s amazing. Josh I can guess at yours and it’s also going to be good. It’s natural for you guys to say everything is fine. Chris, are you agreeing with me?

Chris: Yes, it’s hyper-competitive, it’s cyclical. We’re not going to do crazy deals, but you have to just hustle to find the right deals and make relationships with the right people who can make these ideas happen.

Jeff: We have no clue how these things are going to turn out. Of 20 companies, I have a 50-75% kill expectation. So 10-14 companies should fail. I’ve sold three and none have died, but we’ll see in 5-7 years.

Michael – It’s incredibly cyclical. Everyone gets bubbly when the exits happen. You can make the most money when the exits aren’t occurring.

Jeff: It’s also hard now to find the quality workers.

Michael: Google is talked about as the key acquirer, but they are also driving up the cost of engineering everywhere.

Arrington: True, but there are a lot of key people leaving Google that are fully vested and are either for hire or will be starting new companies. That’s exciting.

Audience: What competitive advantages are any of you building to differentiate? Incubators?

Dave: Incubators have failed before, and they continue to fail. We’re investing in a set of people coming together to build a business. The incubator model shares resources, so when the companies want to build out and scale they lose those resources right back again.

Arrington: So besides the fact you hate Incubators, is there anything to do?

Dave: We definitely share information across portfolio companies to try and help them solve common problems.

Josh: We have CEO meetings as well as an e-mail list to handle things like how do you find a good recruiter, what sort of options package do people get, and other common issues.

It then moved on to some random audience questions and ended up as a very laugh-filled session.

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Where new ideas like Dovetail, Yahoo! Current, Google Current, Memocast, Videoegg, MSN Soapbox, AOL Video, and tons more.. are jumping along on the same bandwagon that has made YouTube into a huge success, we have issues that continue to arise.

The biggest issue for me with most of those companies is the format in which most require you to watch videos – that being Flash. Now, don’t get me wrong, I like Flash for displaying video. In fact, I prefer flash to most media options because if used sensibly, it doesn’t require severe hacking of your Linux install to view videos. Note that I said ‘used sensibly’ — most do not. It is the job of the web developer or media person to decide the format videos play in, and to make that choice well, they need to know what versions are compatible with what operating systems. Sorry if that sounds like actual work, but research is part of the job of being a web developer. This applies to more than just Flash – you need to check what kinds of support there is for any kind of media you intend to use, you need to know whether this is something that comes supported in the base install or if they would have had to be tech-savvy enough to install it manually. It’s about understanding your user.

My first issue with Flash movies – the version of Flash player required. You absolutely need to check what versions are compatible with which operating systems. Read the specs, that is what they are there for. If you hop on over to the Flash section on the Adobe site, and dig around a bit you will find the following system requirements documents:

• Flash 9.
• Flash 8.
• Flash 7.

Now, I hope you’ll go and read those documents, but I’ll summarize here: The only Flash player version inherently available for all Windows, Mac OS, Linux, and Solaris is Flash 7.

Unfortunately, a lot of sites are not using Flash 7 player requirements to display their content. My daughter players games on NickJr and PlayhouseDisney – or she did. They started changing their content over to types not inherently supported by Linux, and now that has become an issue. (Yes, Linux has changed. If my 6 year old can use it, so can you.) A friend of mine tends to place the blame on Flash itself for this, and is boycotting them based on the fact that they aren’t releasing more system compatible versions of the player. While I agree with this in part, I place the majority of the blame on the web developers and media designers. It truly is quite simple to allow the most users to access your content – remember common denominators in mathematics? – use Flash 7 player output.

It’s simple to do. Using Flash: File -> Publish Settings -> Flash (tab) -> Version (dropdown) -> Select Flash 7.

Now why is YouTube so successful? They have the right idea. From their troubleshooting page (emphasis mine):

Next, check to see if your system meets these requirements for running the Video Viewer:

* Broadband connection with 500+ Kbps

While there are lots of new media companies on the web – if they are not implementing their ideas from the start with all users in mind, then they are missing the boat. When there is a simple solution to making your media viewing content accessible to other people – there is no excuse for not doing it.

End Note: If you would like to read the original article, it is online here.

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Nicole Hernandez is a web developer with a specialty in web standards and accessibility. She is the owner of Website Style and publishes technical articles on her blog called Beyond Caffeine.