While Google’s YouTube is reportedly in talks to buy Web content producer Next New Networks, the New York-based startup has just filed with the SEC in relation to $19.4 million in equity financing.

NNN also raised $1 million in debt funding last year right when those YouTube acquisition rumors started swirling. Here’s what I wrote back then:

The potential acquisition of NNN, which also manages a network of independent filmmakers alongside producing its own channels, would give YouTube its first step into producing Web videos in-house.

This would be not only a shot in the arm for the video sharing site proper – upping its ability to squeeze more advertising dollars out of the popular service – but also for Google TV.

According to the WSJ, a deal between YouTube and Next New Networks worth ‘tens of millions of dollars’ could be announced in the coming week.

Indeed, there’s this noteworthy statement in the filing:

The securities contained within this filing were offered and issued in connection with several distinct transactions between 2007 and 2010. No individual offering lasted more than one year.

Since the date of first sale was in May 2007, and the filing is marked to come in relation to the acquisition of securities, I believe it pretty much confirms the Google-NNN deal is done.

We’ll update with more information as soon as possible.

NNN investors include Fuse Capital, Spark Capital, Saban Capital Group and Goldman Sachs.

Success in online video is relative to how much time, effort, and money you put into it. Andrew Baron of Rocketboom offers the (albeit self-serving) chart at right in a post updating the State of the Union for his startup and online video in general. I like this chart because it tries to compare the total capital poured into four different online video ventures and the total cumulative videos put out and consumed by viewers.

Next New Networks is by far the largest, with an estimated 1 billion cumulative video views, but it’s also raised $27 million in venture capital (weren’t they supposed to be bought by YouTube by now?). Revision3 and Rocketboom come in at the next tier with 312 million and 290 million cumulative video views, respectively. A decent accomplishment by both, but it took Revision3 about $10 million in capital to get there whereas Rocketboom got there with only $1.5 million. And then there’s MyDamnChannel, with 105 million cumulative views and $7.5 million in capital invested. Not very capital efficient at all, assuming revenues are tied to video views, which is usually the case.

In order to better visualize the ratio of cumulative views to total invested capital, I created the chart below based on Baron’s original one. Here you can see the capital efficiency better in terms total video views per dollar invested. Over its lifetime, Rocketboom has attracted 193 views per dollar invested, compared to 37 for Next New Networks, 31 for Revision 3, and 14 for MyDamnChannel.

That’s pretty good for a bootstrapped startup, but Rocketboom still only produces one show (albeit daily), compared to a whole roster of shows for Next New Networks and Revision 3. Is Rocketboom pofitable? Baron says, “We’re still here.” And the company, which also operates KnowYourMeme and Mag.ma, is living off revenue since last September. It’s capital efficiency has gotten it this far, but I wouldn’t be too surprised if Rocketboom taps outside investors to help take the company to the next level, just as online video advertising starts to finally take off.

Update: Predictably, other online video startups are taking exception to this chart because they are not included. WatchMojo CEO (and occasional TechCrunch contributor) Ashkan Karbasfrooshan offers up the following stats for his bootstrapped video startup: 225 million video views (not including another 75 million autoplay) and only $1 million invested. That would give WatchMojo a ratio of at least 225 in the chart below. He also sent me a handy table of online video startups and how much money they’ve raised, which I’ve added below.

Listed as investors are Ross Levinsohn from Fuse Capital, Bijan Sabet from Spark Capital, Goldman Sachs and Saban Capital Group.

The potential acquisition of NNN, which also manages a network of independent filmmakers alongside producing its own channels, would give YouTube its first step into producing Web videos in-house.

This would be not only a shot in the arm for the video sharing site proper – upping its ability to squeeze more advertising dollars out of the popular service – but also for Google TV.

As for now, those are just rumors. The funding round, though, is fact.

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.

Online ad technology startup Resonate Networks, which has just raised $5 million in financing, has scored a digital media heavyweight as its new chief revenue officer.

George Stewart, former Executive Vice President of Media Sales at Demand Media and previously SVP of Advertising Sales at Next New Networks, will work directly with Resonate clients to build brands online by leveraging the fledgling company’s “Attitudinal Targeting” technology.

He will work from New York City.

Stewart began his digital media career in 1999 at online music startup LAUNCH.com, where he was VP of Advertising Sales – the startup was acquired by Yahoo in 2001. While at Yahoo, Stewart served as National Director of Sales and Category Development Officer.

Launched in 2009, Resonate claims to have pioneered an entirely new method for reaching consumers based on their values, beliefs, and attitudes, independent of cookie-based behavioral data. The company has stamped a fancy label on said solution and refers to it as ‘attitudinal targeting’ (more about how it works here).

Online television studio Next New Networks is reporting a few milestones today, releasing news that the network has seen over 300 million views across its networks in 2009. The company also claims it doubled revenue from 2008 to 2009 and saw a 70% increase in the number of sponsors.

Next New Networks builds internet based “micro television networks” for targeted niche communities. Over the past few years, Next New Networks restructured and reshuffled its executive team and staff, bringing in Lance Podell as CEO in late 2008 and added a new chief of programming Kathleen Grace in 2009. The company says viewership grew thanks to programming and networks in 2009, which include Fast Lane Daily, Barely Political (aka Obama Girl),Beyond The Trailer and more. In 2009, NNN’s networks grew to over one million subscribers on YouTube, podcasts and e-mail, a 300% increase from 2008.

Although company, which earned a blog post on YouTube’s blog recently, claimed profitability by 2009, that expectation has been held off until this year. While the company as a whole isn’t profitable, we are told that several of its networks are. The company has raised $23 million in funding.

Web video production house Next New Networks is looking for a new CEO. Founder and current CEO Herb Scannell, who will remain as chairman, announced it on the company’s blog. Previously, Scannell was vice chairman of MTV Networks and president of Nickelodeon, where he launched the career of SpongeBob SquarePants. (Not that he’s looking for a SpongeBob type to fill his shoes, necessarily). Next New Networks runs 16 different video Websites, including Barely Political and Channel Frederator, all creating original online video.

So what kind of candidate is Scannell and his investors (Goldman Sachs, Spark Capital, Velocity Interactive) looking for? Scannell writes in his post:

Thus far, we’ve been video-centric, built our network model, and got distribution and advertising up and running. Now, I want to see us go beyond video by building up our web capabilities in key categories, and move the company to make our sites and new offerings even more robust for communities to gather and interact. Hence, I plan on bringing in someone as CEO who has “been there, done that” in building a web business, and who will work with me as Executive Chairman.

Blogs are becoming an executive recruiting tool for startups. Last year, SocialText founder Ross Mayfield used his blog to similarly announce that he wanted to find a CEO to take his company to “thenext level.” Four months later, he found his replacement. (He remains chairman and president)

How long will it take Next New Networks to find a new CEO? If you’ve been there, done that, and want to do it again, send Herb your resume.

The company says it has had 33 million video views so far in March across its 12 video networks, which include Barely Political (home of Obama Girl), Channel Frederator (cartoons), ThreadBanger (DIY fashion), and Veracifier (daily news). Next New Networks also announced a deal with AOL today to distribute its videos.

Personally, in my book, you can never top the original Obama Girl video. Let’s review (for comparison purposes only):

There’s also the whole YouBama phenomenon,which we broke, and now the Washington Post, Yahoo News, and CNN has picked up. I got an e-mail earlier tonight from YouBama co-founder Christopher Pedregal informing me that “Our servers are melting.” They seem to be back up now. I wonder how long before someone puts the Obama Girl videos on YouBama. Check out Craigslist founder Craig Newmark’s Obama video testimonial. He ain’t no Obama Girl, but he is sincere. Where are all the viral videos for Hillary or McCain?

This acquisition is Next New Networks’ first foray into politics, and BarelyPolitical will now be served along side Next New Network’s existing content including Channel Frederator. Terms of the deal were not disclosed.

Whilst the Obama Girl video series (there is more than one) is perhaps an acquired taste, its viral success is quite remarkable, with the original video having been seen over 100 million times.

Under the deal BarelyPolitical will launch multiple regularly scheduled shows, including frequent reports from its videobloggers and correspondents. The first project launched by BarelyPolitical with Next New Networks, “I Like a Boy“, a music video co-produced with the Iraq Afghanistan Veterans of America, racked up more than 1.5 million online video views in its first week, and was featured on various media outlets including CNN American Morning, Fox News, and ABC’s Good Morning America.

See our previous coverage of Next New Networks here.

The New York based company launched in January with $8 million in funding from Spark Capital.

The team behind the service is impressive. There are five founders of the company, Herb Scannell, Fred Seibert, Jed Simmons, Tim Shey and Emil Rensing. CEO Scannell is the former President of Nickelodeon Networks and Vice-Chairman of Viacom’s MTV. Seibert was the original creative director of MTV and a former president of Hanna-Barbera, Simmons a former senior executive at Excite and Turner Broadcasting. Shey cofounded and ran interactive agency Proteus and more recently produced Amanda Across America, Amanda Congdon’s post Rocketboom video blogging project. Rensing was an engineer at AOL before co-founding Frederator Studios.

Next New Networks aims to build internet based “micro television networks” for targeted niche communities. The concept brings together elements of traditional TV networks with Internet functionality that invites viewers to contribute, share and distribute content.

Next New Network’s PR spokesperson Brooke Hammerling shared the following description of a micro-network as the company sees it:

“[micro-networks are] a brand that lives on the internet and creates a relationship with its audience wherever it goes. In practical terms, every network of [Next New Networks] will have one or more shows, 3-11 minutes of programming, on a weekly or daily basis, a website, and a feed that can be subscribed to in places like iTunes or My Yahoo. Many may also have a Channel or homepage on sites like YouTube. You can go to any of those places and get every episode of the networks’ shows when and how you want them”.

Think Weblogs Inc meets video blogging with an everywhere distribution model.

Next New Networks has already launched 9 micro-networks with a plan to expand that number to 30:

Indy Mogul: a the network dedicated to DIY filmmakers and film lovers.

Channel Frederator: billed as the world’s original cartoon podcast, it serves the funniest cartoons sent in by viewers each week.

Fast Lane Daily: a car news network providing 5 minutes of fresh car news every day.

Pulp Secret: “the world’s first network dedicated to comic book news and culture”. Includes comic book news, interviews and reviews.

ThreadBanger: targeted at people who make their own clothes and accessories. Includes DIY tips and how-to guides.

Veracifier: “Alternative channel” with “original ideas”, reporting and commentary on news of the day.

VOD Cars: promoted as the “#1 Broadband Car Network”. Features clips of driving, racing, showing, drifting, posing and more from viewers. One for rev-heads.

The company recently signed a distribution deal that will see 7 of the 9 channels appearing on Veoh.com.

The content is niche targeted so it’s not going to appeal to everyone. However with $8million in funding and a wealth of industry experience, Next New Networks will be a company to watch in this space.