It certainly is a sign of the times: Two years ago video sites were little more than an idea. There are now 200 of them, by some estimates, led by YouTube, the internet phenomenon of the last six months.

It's so crowded, in fact, that new entrants may not even be able to buy their way in.

Which is just what eefoof has in mind.

The video site, launched earlier this month by Kevin Flynn, the man behind the popular "Peanut Butter Jelly Time" video, is making users an intriguing offer: It will split half the site's ad revenues with the video creators based on the number of hits their videos get. The most popular videos could make some real money for their owners.

The problem eefoof faces, of course, is YouTube. The site pretty much dominates the category, capturing 43 percent of all visits to online video sites, according to Hitwise. Video makers will be choosing between the chance to make money on eefoof or gain far wider exposure on YouTube. Here's betting they'll choose the latter.

"People that really have talent are going to do the best they can to show their work in an environment that will yield results. At the moment YouTube would be that place," says Todd Chanko, analyst at JupiterResearch.

On Sunday, YouTube, itself barely a year old, reported that viewers now watch about 100 million videos a day on its site. That’s up from 3 million in December.

What’s more, visits to YouTube were up 87 percent from April to June, while visits to the category overall were up only 30 percent, says LeeAnne Prescott, senior research analyst at Hitwise. "YouTube’s growth is really outpacing that category."

Indeed, at 43 percent its market share is far above the No. 2 site, MySpace Videos, at 27.4 percent of total visits to online video sites in the week ended July 8, 2006. At a distant No. 3 was Yahoo! Video Search, only mustering a 7.22 percent share.

Eefoof's launch follows that of Revver, which launched back in October with the same idea of paying video producers, but that site has not cut into YouTube's dominance. YouTube receives 600 times more traffic, says Hitwise's Prescott.

All this could change of course. Things seldom stay the same on the internet. Microsoft is reportedly planning to launch a site that could challenge YouTube.

And YouTube, which is currently backed by venture capital money, will ultimately need to figure out ways to capitalize on its success, and there's always the risk, though slight, that it could drive off visitors with the wrong ad model.

But for now, says Prescott, "if you want to be seen in the world of video you really need to be on YouTube, because that’s where people are."

Meanwhile, in online ratings for the week ended July 9, the top five parent companies remained the same. Microsoft was No. 1, followed by Yahoo, Time Warner, Google and News Corp., according to Nielsen//NetRatings. Top brands also were the same as the past two weeks: Yahoo, MSN/Windows Live, Google, Microsoft and AOL.

GUS Plc once again retained the top spot among advertisers, delivering 5.81 million impressions to No. 2 NexTag’s 1.5 million. NexTag bumped ahead of Vonage, which fell from second to No. 16. Yahoo served up the most ads, 14.6 million, followed by MySpace at 7.02 million, both down from the previous week.

Sessions fell from 16 to 15, and domains visited per person dipped to 36, one fewer than last week. Average PC time per person dipped more than 8 percent to 14 hours, 30 minutes and 19 seconds for the week.

Heidi Dawley is a staff writer for Media Life.	© 2009 Media Life Magazine

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