01/13/2007 01:59 pm ET Updated May 25, 2011

Release 0.9: Compare and contrast (video)

Last Tuesday night in Mountain View I heard Robert Kahn in conversation with Ed Feigenbaum at the Computer History Museum. Both are justly revered "fathers" in information technology - Kahn as the man who designed and built ARPANET, the Net's precursor, and Ed Feigenbaum as a leader in the field of expert systems. It was an engaging evening, and one that would have appealed to a much larger audience than the mostly aging, mostly male crowd of 150 or so people who showed up. It made me wonder if had a deal yet with the Computer History Museum. (Not yet, but Brian Gruber, please meet Len Shustek!)

I had met with Brian Gruber, the founder of, on Sunday. This is a start-up that gingerly describes itself (though it sounds a little too pat) as C-SPAN meets YouTube meets MySpace. In short, it goes against the grain and offers long-form video - speeches, lectures, presentations and the like - from putatively authoritative sources such as the Council on Foreign Relations, the Hoover Institution, the Long Now Foundation (I'm on the board) and C-SPAN itself. But yes, you can also get the videos in bite-sized chunks (15-second teasers and 3-minute "ForaCast" trailers)...and the site is richly organized with sections you won't see much of on YouTube such as "Think Tank."

The basic model is advertising revenue sharing and premium subscriptions. Founder Gruber, a longtime marketing and cable executive, had originally expected to charge for the content, but he wised up. After a period of market testing, he's planning to offer subscriptions for extra features such as annotation, more granular control of the player, unlimited access to archives and multiple-format downloads, high-resolution full screen format and user publishing tools (create your own channel).

Of course, I loved it... even though I'm smugly dubious of its broad appeal. There's an amazing amount of interesting stuff going on, from speeches by officials and political debates to book readings, panel discussions and academic presentations that's worth preserving, not just for posterity but for next week. And it's nicely counter to the trend...

Just the clips, ma'am

...which I saw in spades when I met with Matt Sanchez of VideoEgg on Tuesday. VideoEgg, in case you haven't noticed, is YouTube meets the OEM business model: It offers a video-sharing platform that underlies the community video services offered by such social networks as Bebo, Consumating and Hi5. Co-founder Matt Sanchez, one of a trio of Yalies, first encountered the challenges of managing disparate video clips when they were working on an X-Prize style soliciting volunteer PSAs (public-service announcements), from which just a few were selected and shown, saving public service agencies such as the America Prepared Campaign and the National Campaign to Prevent Teen Pregnancy hundreds and thousands of dollars in production costs - and probably unwittingly engaging hundreds of competitors in their causes. This evolved into a now 60-person business, with funding from First-Round Capital, August and Maveron.

Sanchez, who started out doing good (and still has a conscience) has been drawn into the business in a big way. He's fascinated by how people interact around the clips - most 2 minutes or less. The business case is to use the content to lure viewers...and then to help advertisers create engaging content too. "You have this tiny box that's the focus of the viewer's attention; he's just going to be more engaged than if he was sitting back looking at a variety of frames cluttering the screen," says Sanchez. Typically, VideoEgg runs a small ticker below the video; if the user clicks on it, the video will halt (and resume properly later) and the ad will fill the viewing frame. Advertisers need to learn how to use it properly, he says. [Note: This is not just Sanchez's obsession; I was talking to him specifically in preparation for an internal meeting/panel discussion with a group of WPP executives that I am helping to organize. I'm on WPP's board.]

For example, no one wants to leave the site they're on to buy a ticket...but if you're watching a clip about, say, Black-Eyed Peas, and you can buy a ticket to their next concert in situ...that gets kinda interesting. And indeed, VideoEgg's content gets click-through rates above 5 percent for well-crafted ads. Most advertisers are still just learning, but the short message from Sanchez is the best ads aren't just messages; they are invitations to do something.

So, where does that leave us? VideoEgg is a hot property - a way for websites to offer their own version of the YouTube experience, leavened by a more cohesive community. And it's a way for investors to try to participate in the YouTube *financial* experience... Valuation is undisclosed, and it's probably an order of magnitude less than $1.6 billion - but that just leaves room for growth.

Yes, Sanchez is fascinated by the business and has left philanthropy behind for now... but he's fascinated, not greedy. It's intellectually exciting to run what amounts to a Petri dish for different approaches to user-generated content as a business and as a social context. The basic VideoEgg platform is growing and evolving, and Sanchez and his partners have the luxury of trying it out in a range of iterations with different partner sites.

Back to the long term, by contrast, is a more fragile property. Gruber is on the hunt for capital, but he needs to be careful whom he takes it from. The imperatives that drive VideoEgg - and that do indeed make its content more engaging - could destroy It's an interesting question far beyond, one that bedevils everything from classic newspapers and reporting organizations to anything that promotes substance over flash...yet that can't easily maintain its purity in an advertising-driven culture. How can you find an investor who values the long term? And how sure can you be of whom that investor may sell to? Can you put some kind of covenant into the charter that can protect you? In the old days, newspapers did it with voting and non-voting stock, creating protections that are gradually being eroded in the public markets and by a governance system that considers respect for journalistic values tantamount to a breach of fiduciary duty. (See all the news about the ownership struggles around the New York Times, the Tribune, etc. etc.)

Gruber's only sizable investor currently is Will Hearst - yes, the old man's grandson. He's also an affiliated partner at Kleiner Perkins, but this is a personal investment, and not one for which he is accountable to his partners or in turn to KP's limited partners.

Yet (I contend) should not be run by a foundation, even as it works with foundations such as the Computer History Museum (coming soon?). The for-profit model allows for much more flexibility - and sustainability. This is a tension that will not go away.