“The problem was that no one wanted to type in the bar they were at,” Adam Cahan told us when we met with him last week to see his latest venture, IntoNow. He wasn’t talking about his startup. Instead, he was talking about Dodgeball, the location-based service that came well before Foursquare. That is, he was describing why Foursquare took off while Dodgeball didn’t, even though they had the same basic concept. GPS being built-in to smartphones changed everything, he said. “Now our industry is in the same place. We’re the GPS layer.”

What industry is that? So so-called media check-in space. (Though don’t use the word “check-in” around Cahan, he hates it.) More specifically, IntoNow is trying to own the tv engagement app space. And while competitors like GetGlue, Miso, TunerFish and others all beat IntoNow to market, they have a secret weapon: it’s called SoundPrint.

Just like GPS with location services, SoundPrint, a new technology created by IntoNow, allows you to automatically “check-in” to watching a show simply by hitting a button in the IntoNow app. How? It reads the sound waves and patterns of each television show (and a growing collection of movies as well) and matches it with a database they keep. Yep, it’s a lot like Soundhound or Shazam, but for video content.

And it’s amazing how well it works.

When I first got a demo from Cahan and co-founders Didier Hilhorst and Rob Johnson, I was amazed to the point where I was dumbfounded. You see, the first thing they demoed the app on was a live broadcast of a CNN show featuring Hillary Clinton talking. Within seconds, IntoNow picked up the exact name of the show. I wasn’t sure how this was possible since the same Clinton sound clip could be playing on a number of different shows. But there are a few keys to how SoundPrint works (most of which the team won’t go into since it’s their patented technology) — one key is to scan all live channels and bring in their audio footprint in realtime.

IntoNow knew the CNN show I was watching because their backend was also watching it. It was just a matter of lining up the audio. Which again, it did, in seconds.

But IntoNow works for much more than live TV. Their content catalog currently includes some 140 million minutes of broadcast TV. That’s roughly 266 years worth of video. And it’s growing more with each passing second. They’re monitoring 130 broadcast channels in realtime, 24 hours a day — all of which is stored and saved.

After a few more demos, I was mostly sold. But, of course, there’s always the possibility that a sneaky startup could try to get things perfectly aligned for a demo. I’m not suggesting anyone would stage something, but there could be ideal conditions (and/or shows) set up. So I took the app home to try it out for myself. It worked even better there.

I put on one show, hit the button on the IntoNow app, boom: 4 seconds later, it got it. I flipped the channel, same result. I tried it with a show I had DVR’d. Worked like a charm. I tried it with an older movie I was watching on Netflix. Perfect. I tried it with a live sporting event. Yep, it even worked with that.

Okay, so IntoNow has clearly built some impressive technology. But why enter this space? Because 62 percent of leisure time is spent watching TV. It’s the biggest single activity that people do after working and sleeping, Cahan says. And when they’re watching, increasingly, they’re interacting with the Internet in some way. Currently, much of that is surfing the web on a laptop or mobile device. So IntoNow set out to make a “companion experience” for TV and movie watching.

Once you “check-in” to whatever you’re watching, that info is sent out to your IntoNow social graph (and you have the option to share on Facebook or Twitter). From here, within the app, you can see what your friends are watching. And comment on any of those shows. You can also see what shows are popular at any given time. And there’s a way to discover new shows that will be based on your social and interest graphs.

The app also has indicators to let you know if a piece of content is currently airing. So if I see a friend is watching a certain episode of a show, I can see that it’s currently on live TV and I could flip over to it. Or, if it’s on Netflix, there will be a link to get to it from within the app.

So, what are the downsides? Well, first of all, IntoNow is iPhone-only for the time being. But the team says that Android support will be coming shortly. Secondly, due to some licensing and/or legal issues, they don’t have a big collection of newer films. This includes not only movies still in theaters, but also those just released on DVD. Again, the technology is based around what has been shown on television before, so newer stuff won’t be there, and they’re not indexing pay-per-view. When I joked that they could send a team into theaters to record the sound of new films, Cahan did assure me that they’re thinking about ways to expand their content reach.

But again, they already have 140 million minutes worth of content. And everything I watched, IntoNow found.

In terms of how they monetize this idea, there are a number of possibilities. They could team up with some consumer electronic makers to build their system directly into hardware. Or they could do some potentially interesting stuff with the viewing data to disrupt something like Nielsen. They’ve also already built in a way for SoundPrint to detect commercials. So when it does, there’s a lot of potential there in terms of what IntoNow could do with advertisers within the app. “We’re also into this because we think there’s big business behind this,” Cahan says.

Not surprisingly, IntoNow has already received funding from Greylock Ventures and Redpoint Ventures — though they won’t disclose how much. Also not surprising is that those are two of the backers of Auditude, the video monetization startup which just raised a new round of funding and saw Cahan transition out as CEO earlier this month. A few of the IntoNow team members had been working there when they decided to spin this project off (though Auditude owns no part of IntoNow). The IntoNow team members also include veterans of Google, Microsoft, IDEO, MTV, and Stanford’s AI program.

As was the case with me, seeing is believing with IntoNow. So download the app and try it out yourselves.

Auditude, a video management and monetization technology provider, has raised $11 million in second-round funding from Granite Ventures, Greylock Partners, Redpoint Ventures and Silicon Valley Bank.

In addition, the company this morning announced that it has appointed Jeremy Helfand, former president of United Online Media Group and Advertising.com senior executive, as its new CEO.

Adam Cahan, who has led Auditude as chief exec for the past three and a half years, will continue to serve as an advisor. He is also moving into a new role as CEO of IntoNow, a technology startup also backed by Greylock Partners and Redpoint Ventures.

Auditude says it intends to use the extra capital to further expand into mobile video, IP-enabled devices and premium distribution channels.

Already, the company claims, its platform manages billions of monthly video impressions, with clients such as Comcast, Dailymotion, Lionsgate, Major League Baseball, Sony Music and Yahoo.

Chris Hollenbeck, managing director at Granite Ventures, has joined Auditude’s board.

Editor’s note: Guest author Ashkan Karbasfrooshan is the founder and CEO of video site WatchMojo. In this post he examines looks back at the online video deals of 2010 and what deals could happen in 2011. You can find his previous guest posts about online video here.

With the recent rumor that Google’s YouTube unit was looking at acquiring video content company Next New Networks, it’s clear that anything can happen in the rapidly growing online video space.  While some are shocked to see that Google may cross over and own content, the rumor does sound plausible:

• Next New Networks generates the vast majority of its views on YouTube and if the companies were under one umbrella, it would remove some of the monetization obstacles and challenges Next New Networks probably faces when trying to sell their YouTube inventory.
• YouTube, meanwhile, has massive online video street credibility but totally lacks the human sensibility required in media and content in particular to take a rising star on the site and take them to the next level.  That is Next New Networks’ business.

The combination would allow YouTube to fold in Next New Networks and use it as a talent management platform, basically, and give the video aggregation site the ability to create videos if need be.

Loaded with nearly $25M in venture financing, it’s not quite the initial public offering that some of their investors were hoping for, but let’s face it, an exit to Google is nothing to be ashamed of.

Close, but no cigar: IPO Talk Will Increase

In fact, while you can blame Sarbanes Oxley or a lack of credible initial public offering (IPO) candidates, it is likely that 2011 will come and go with very few, if any, major liquidity events in the public markets for online video startups.  As such, the most likely path to liquidity for venture capitalists (VCs) remains mergers and acquisitions (M&A).  With VCs having invested in so many online video startups and industry revenues still not matching the lofty expectations that whet VCs appetites in the first place, a lot of boards will cash out in 2011 when buyers come knocking.

Only Certainty: Dealmaking Will Continue

After many years of expected consolidation, 2010 saw a wave of acquisitions:

• AOL acquired StudioNow and 5Min (as well as TechCrunch, of course)
• Specific Media acquired Broadband Enterprises
• Undertone acquired Jambo
• VideoEgg acquired SixApart
• Tremor acquired Scanscout

Apart from Video Egg’s merger with Six Apart which was largely based on the shared VCs doing some financial engineering, with these deals, we saw examples of both vertical and horizontal integration.

The terms horizontal integration and vertical integration are used in microeconomics and strategic management, whereby:

• horizontal integration describes a strategy used by a business that seeks to sell a type of product in numerous markets. Horizontal integration occurs between two firms which are in the same industry and in the same stage of production, ex: a car manufacturer merging with another car manufacturer.

Conversely:

• vertical integration combines companies in a supply chain by a common owner. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need.

Vertical Integration

AOL’s moves were examples of vertical integration:

• StudioNow gives it a platform to hire producers to create videos for its AOL properties and myriad brands.
• 5Min gives it the opportunity to distribute its own videos and those it has licensed to more places around the Web.

These deals have given AOL an end-to-end capability in video.

Horizontal Integration

Meanwhile, we saw display banner ad networks venture into online video:

• Specific Media acquiring Broadband Enterprises and Undertone acquiring Jambo enabled giant ad networks in the display banner arena to enter the video market rapidly.
• Tremor acquiring Scanscout is plain consolidation among two competitors who probably got tired of tussling in the marketplace and eating into each other’s margins.  The deal gives them a bigger footprint and a march towards an initial public offering.

In this context, horizontal integration occurred between potential or actual competitors.

2011 Storylines

There is nothing to suggest that 2011 will be less busy on the online video deal front.  Here are some of the trends I think will drive M&A activity in 2011.

Ad Networks

Ad networks are rife for consolidation and can be broken up into:

• The source of technology, Ad Servers: the software required to properly serve ads and offer the kind of targeting and reporting that advertisers and publishers expect these days.
• The source of media, Ad Networks: the matching and intermediating between advertisers and publishers

A few firms have footholds in both: Auditude (ad server) also runs Cross Point Media (the ad network), Tremor runs the Acudeo ad server; while some operate under the same moniker (Adap.tv).  Some focus just on one space: LiveRail doesn’t have buy or sell media, it only offers an ad server.

With Jambo in the hands of Undertone and Broadband Enterprises part of Specific Media, expect display banner ad networks (such as Specific Media, Undertone or Tribal Fusion) to acquire video networks or see consolidation within video ad networks and servers.  There are no shortage of remaining players: Adap.tv, Auditude/Cross Point Media, Brightroll, Freewheel, LiveRail, Overlay.tv, Panache, Spotxchange, Tidal TV, Video Egg, Yume . . .  to name a few, with Tremor becoming a leading IPO candidate.

Big Media: A state of inertia

We have yet to see traditional media companies with their large purse strings step into the ring.  It’s only a matter of time though, as Magna’s latest figures show that online advertising will overtake newspapers by 2013, though TV advertising will still command the lion’s share of all ad dollars through 2016, with an estimated 40 percent share at that point.  Although, by then online video will account for $11.4 billion in global ad spend.  Where online video trumps television advertising is in growth rates: online video will grow at an average rate of 19.6% through 2016 (with estimated 50% growth in 2011 alone), versus a 7.5% growth rate for TV advertising.

With large media companies hoarding more cash than ever, it’s fair to assume that those who attempted to “build” from within and failed will soon shift gears and look to “buy”.

But the reality is that big media, by and large, still doesn’t know what it wants to do in the arena.  With Rupert Murdoch divesting from the Web in general and shifting focus from paywalls to iPad publications, it’s unlikely that News Corp. will ante up much for online video.  How about CBS?  With changes at the very top of’ management, I also don’t see them making too many shifts back into online video. Disney is more focused on gaming than online video.  NBC Universal, now in the hands of Comcast, will probably be stuck in integration mode for most of the year.  Time Warner seems intent on continuing its TV Everywhere initiative to maintain its margins and offline revenues.

Newspaper companies stand the most to benefit from online video, but they will spend the first half of the year wading through the opportunities to understand what strategy and targets will most help their business: technology to serve ads or video content to sell ads against.

The Portals and Major Online Companies

AOL certainly put itself in an enviable position with a series of moves, though integrating the various moving parts as its dial-up business continues to shrink will remain a challenge.

It’s now Yahoo!’s turn at bat.  With Ross Levinsohn coming on board and being a content guy with a penchant for deal-making, Yahoo! will mimic AOL and get more serious about video, but what they actually do is anybody’s guess.  They just unveiled their local strategy.  Is video next?  Don’t hold your breath.

Microsoft shuttered its Soapbox property and it remains to be determined what it will do in online video.  With Redmond admitting it offered Facebook a $15 billion offer and Steve Ballmer courting Twitter’s CEO Dick Costolo, I suspect Microsoft has priorities other than video.

Meanwhile, with $25 billion in cash and equivalents, Apple can move in multiple directions, namely:

• mimicking its acquisition of mobile ad network Quattro Wireless with an acquisition of a video ad network that could enable its foray into advertising; iTunes is a cash cow, yes, but it could hedge itself by monetizing its booming Apps business via advertising and the iPad is the perfect video consumption device
• it bought Lala to enter the music streaming business.  By the same logic, it could buy a CDN company to stay one step ahead of the surging bandwidth needs of mobile video delivery and find a way to rely less on carriers (BitGravity, Edgecast, Limelight Networks or Panther Express are some targets)
• the acquisition of a major ad agency (or a parent holding company); this is one of the more unlikely of scenarios, but judging by some of the challenges Apple has had with its iAd initiative, it’s not crazy altogether
• a livestreaming platform such as Justin.tv, Kyte, Livestream/Mogulus, Qik, uStream
• a video search engine or discovery tool, to attack Microsoft and Google in the next area of search (it would be crazy to attack Google head on in traditional search) and it can find a plethora of companies looking to exit: Ramp (formerly Podzinger/Everyzing), Blinkx, Dabble, Pixsy, Cast TV, Clipblast, Mefeedia.

Amazon has its hands in storage (S3) and content delivery (Cloudfront).  It’s possible it will buy a video player technology to offer end-to-end solutions.  There won’t be any shortage of likely targets: Ooyala and Brightcove might be too expensive but the list of eager sellers includes bliptv, Kaltura, Feedroom and VMIX.

Ooyala and Brightcove will themselves look at tuck-in deals as they ramp up their own growth.

Facebook is a major player in online video, peaking at No. 2 in comScore’s August video rankings when it surpassed Yahoo! (though Yahoo! regained the No. 2 spot the next month in September).  Facebook has a tendency to acquire companies for its people, but like Apple, it could also acquire:

• an authentification system to differentiate the massive amounts of video it is hosting
• a CDN company to ensure stability and lower hosting costs as it continues to grow
• a livestreaming platform such as Justin.tv, Kyte, Livestream/Mogulus, Qik, uStream
• an ad network to make money from video.

InterActive Corp. (IAC) is sitting on a lot of cash and investing in content creation efforts via Electus and Notional.  It would be logical for them to now invest in some kind of distribution play to ensure that their programming is actually seen: potential targets include DailyMotion, Metacafe or Nabbr.  It does own Vimeo, but that doesn’t offer the kind of reach marketers need.  We saw Sony do this via their Grouper acquisition a few years ago, renaming the website Crackle and using it to showcase their programming.  While the jury’s out on the success of that deal, we might see IAC pull a similar move.

Will any of these deals actually happen?  Who knows.  Predicting this kind of thing is a recipe for failure, but there is an adage that says “buy on the rumor and sell on the news.”  With more hype and expectations surrounding online video, the buying will continue.

Now that the election is over there is going to be no shortage of punditry looking to pinpoint exactly what moments in the last 18 months contributed to Barack Obama’s victory over John McCain. No one is better equipped for this analysis than Auditude, the video fingerprinting company that was recently employed to power part of MySpace’s video platform.
Using a database chronicling millions of hours of video content, Auditude can identify the original source of video clips scattered across the web, even if they’re only a few seconds long. And with that, the company can figure out which speeches, gaffes, and ads actually mattered to The People.

For its initial analysis of the election, Auditude has mapped out the popularity of each moment in this year’s three presidential debates. Crawling across sites like YouTube, Veoh, MySpace, and Yahoo, the site isolated several thousand videos depicting portions of each debate, and then laid them out in a timeline to determine which moments were the most viewed.

Unsurprisingly, the majority of popular clips involved McCain gaffes and moments when Obama said something that was especially poignant. This bias can be attributed to Obama’s much stronger web presence, and a generally liberal bias on sites like Digg where videos tend to go ‘viral’ and garner millions of hits. That said, there’s still plenty of useful data to be found (for example, note that the infamous “that one” statement only had around half as many hits as McCain’s “Zero?” reaction in the third debate).

Below are charts for each debate, along with links to the highlighted clips:

Clips:
Eisenhower ‘Goof’
You Were Wrong

Clips:
That One

Clips:
Zero?

Since YouTube heralded the era of user-uploaded videos, media corporations have been fighting a hopeless battle to regain control of their content, sending out endless waves of DMCA notices in a vain attempt to take down countless clips scattered across the web. In the last year sites like Hulu have made progress – it’s finally possible to legally embed a clip of The Office in your blog, but publishers continue to lose out on millions of video clips that were uploaded without permission.

Now MySpace – a site that once seemed the antithesis of innovation – has implemented an exciting new ad platform called Auditude that may change the way content owners treat uploaded video entirely. The new platform will automatically identify any uploaded video clips from a number of shows produced by MTV Networks (including my personal favorite “The Daily Show”), and will display an overlay when the clip is played that shows which episode the clip originally came from, its original air-date, and links to online stores where users can buy the entire episode.

In the past it has been nearly impossible to effectively monetize user-uploaded videos because they are typically tagged with such informative titles as “REally cool!” and “hilarious”. The Auditude platform ignores this information, relying solely on fingerprints taken from the clip’s audio and video data. These fingerprints are matched to prints in Auditude’s massive database, which spans over 250 million videos and 4 years of television content, all sorted by show and air date.

Even more impressive: Auditude can fingerprint a portion of a video that is only a few seconds long and identify which show it was originally taken from. Once the clip is identified Auditude will overlay an ad within the video, allowing publishers to monetize their content even when it was uploaded by someone without permission and without any legible tagging information.

MySpace will be implementing the system with initial support for content from MTV Networks, with shows including The Colbert Report, Punk’d, and Sarah Silverman. So every time you post a clip of Jon Stewart ripping on the presidential candidates, someone is going to get paid, and users won’t have to deal with the often-clunky proprietary video players offered by each network. And instead of trying to prevent these clips from making it onto MySpace in the first place, content owners will want users to upload as many as possible.

Unfortunately, this may prove difficult: after years of being told not to upload these videos, users will probably take a while to warm up to the idea. But if it catches on (and it probably will), expect to see content owners flock to form partnerships with MySpace – there isn’t currently another video platform out there that is able to identify and monetize content this effectively. We’ll probably also see the Auditude platform implemented elsewhere as other sites try to catch up.

Last year YouTube launched a similar service called Video ID that gives publishers the option of either taking down illegal content or placing ads on it.