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Confirmed: AOL Buys Video Syndication Company 5min (For $65 Million)

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AOL is buying video syndication network 5min Media, reports AllThingsD. According to Israeli news outlet YNews, this is indeed a done deal, and the price is between $50 and $65 million.

It isn’t exactly what you’d call a stellar exit for 5min’s investors, who pumped just south of $13 million into the company, but not a terrible one either.

The acquisition will reportedly be announced Tuesday morning.

Update: the official confirmation has arrived (press release below):

Launched back in 2007, the site was initially a portal for how-to videos, but eventually grew into a video syndication giant. That means 5min aggregates tens of thousands of instructional, knowledge and lifestyle videos across a wide variety of categories and dynamically distributes them to partner websites such as Answers.com and DailyMotion.

Video content originates from small indie producers to big-name brands and media companies, and the topic ranges from recipes, yoga and fitness routines, tech tutorials, DIY projects for home and garden and health videos on specific conditions to beauty and fashion tips.

5min claims its Video Syndication Platform currently reaches over 160 million uniques per month.

The company boasts proprietary semantic technology dubbed VideoSeed powering its Syndication offering and helping bring its “Video Everywhere vision” to life across virtually any site. VideoSeed contextually matches the most relevant videos in its library with a Syndication Partner site’s existing text content.

You can see how this fits into AOL’s nichebuster content strategy, which is unsurprisingly taking some serious time and effort to translate into results that please its shareholders.

In January 2010, AOL moved to acquire StudioNow for $36.5 million in a bid to integrate a solid video creation platform into its content management system Seed.com.

AOL at the time said it would harness StudioNow’s technology platform and network of more than 3,000 creatives to develop and produce professional videos at the request of AOL editors.

Update: official press release:

AOL Acquires 5min Media, Web’s Largest Video Content Syndication Platform

Combination of 5min Media and AOL’s Video Capabilities Creates Powerful End-to-End Offering

NEW YORK–(BUSINESS WIRE)–AOL Inc. [NYSE: AOL] today announced it has acquired 5min Media, the Web’s largest video syndication platform.* The acquisition allows AOL to significantly expand its consumer offering of contextually relevant, high-quality video across its sites, increasing the AOL Network’s appeal to advertisers and is expected to further enhance the distribution and monetization of AOL-produced original video content throughout the Web.** Deal terms were not disclosed.

“Our acquisition of 5min Media is the latest in a number of steps we have taken this year to better position AOL to capture the growing video opportunity on the Web”
“Our acquisition of 5min Media is the latest in a number of steps we have taken this year to better position AOL to capture the growing video opportunity on the Web,” said Tim Armstrong, Chairman and Chief Executive Officer of AOL. “AOL is building a video ecosystem for the next decade. 5min Media is the perfect complement to our powerful video capabilities — it provides a missing piece in the AOL value chain that completes our end-to-end video offering from content creation through syndication and distribution to the consumer experience and monetization.”

“AOL and 5min Media share the same excitement about the direction our industry is taking, and our complementary video capabilities make us a compelling fit and an attractive combination for content creators and publishers,” said Ran Harnevo, Co-Founder and Chief Executive Officer, 5min Media. “We’ve seen rapid and successful growth as an independent organization and becoming part of AOL is a natural next step. We’re confident that AOL’s organizational horsepower, combined with the vast library, audience and syndication capabilities 5min Media offers, present compelling opportunities for AOL as well as the content creators we work with and the publishers we serve.”

Leading Video Syndication Network and Library to Enhance AOL’s Properties

5min Media is the world’s leading video syndication network with a library of more than 200,000 categorized, tagged and rated videos from more than 1,000 of the world’s largest media companies and professional independent video producers. Founded in 2006 and headquartered in New York City with offices in Tel Aviv, 5min Media has been named the largest U.S. independent video property by comScore, with more than 20 million unique viewers and more than 130 million video streams (including ad and content videos) in the U.S. in August 2010. 5min Media’s growing network of 800 partner sites allows content creators to reach this audience of targeted viewers across 21 different verticals, including six verticals – Home, Food, Beauty / Fashion, Health, Travel and Pets – that lead their categories, according to comScore Video Metrix, August 2010. VideoSeed, 5min Media’s proprietary semantic technology, contextually matches the most relevant videos with a partner site’s text content to enhance the consumer experience and increase monetization rates.

AOL has already begun to integrate 5min Media’s video content on its sites through a commercial agreement executed prior to the acquisition. “With 5min Media we’ll be able to add more video inventory to our pages. Importantly, we’ll also be able to identify video content holes among our sites, tap our StudioNow capabilities to fill those needs and create a truly ‘demand informed’ video library,” Armstrong said.

Combination Completes Next Step in AOL’s Value Chain

With the addition of 5min Media, AOL will significantly increase its consumer offering in video programming and connect consumers with high-quality video. In January, AOL acquired StudioNow, the premier online platform for quality video content creation and distribution. With StudioNow, AOL has formed a fully functional platform to produce high-quality video content in a rapid, cost-effective and scalable way for both AOL as well as third-party publishers. In addition, AOL is forging exciting new partnerships to provide relevant content to specific audiences, including partnering with: The Ellen DeGeneres Show; Marlo Thomas; The Jonas Group and MGX Lab to found Cambio (www.cambio.com); and A Squared Entertainment LLC to create children’s content featuring Warren Buffett, Gisele Bündchen, Martha Stewart and the late Carl Sagan.

*comScore Media Metrix data, August 2010

**According to eMarketer, online video advertising spend is expected to grow from $1 billion in 2009 to more than $4 billion by 2014, making it the fastest growing format in online advertising. At the same time, the Cisco Visual Networking Index predicts that video will account for more than 60 percent of all consumer Internet traffic in 2013.

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