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AOL demonstrated the current obsession of internet companies with online video on Tuesday, announcing the acquisition of Truveo, a video search start-up.

The deal, for an undisclosed sum, was completed just four months after Truveo launched its service and was reported to be the largest made by AOL since its $435m purchase of Advertising.com in 2004.

The announcement came less than a week after Google launched its Video Store product, selling TV programmes and other video through online downloads and came on the day that Apple announced it was expanding its video offerings through its iTunes service.

Steve Jobs, chief executive, told the Macworld conference in San Francisco that more than 8m videos had been sold since they were first made available in October. Clips from NBC’s Saturday Night Live comedy show and other material would join shows from the ABC and ESPN networks.

AOL said the acquisition of Silicon Valley-based Truveo would enhance its position established when it bought another video search service - Singingfish - in November 2003, which led to the launch of AOL Video Search last June.

AOL has specialised in streaming video - offering the Live 8 concerts online last year and creating the Hi-Q high-quality video playback format.

Video search has proved a difficult technological nut to crack, with images harder to find than simple text. Truveo had developed a technology known as “visual crawling” that allowed it to discover video files in real time that were missed by other search engine crawlers.

AOL said that once Truveo had been integrated into its existing products, AOL.com would deliver a one-stop shop of original and premium video content to consumers

The acquisition continues the trend of internet companies making acquisitions to keep up with features offered by their rivals. AOL has bought Truveo, MusicNow, Weblogs, Xdrive and Wildseed in the past six months.

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