Roo Group, an entrant in the online hosted video space, said Tuesday it would purchase an online video startup called MyVideoDaily in a deal mostly meant to obtain MVD’s personnel and software technology.
If nothing else, the terms of the deal — $350,000 and a half-million shares of Roo stock — shows what the market price is these days for online development teams like MVD’s five-person outfit. According to Roo CEO Rob Petty, MyVideoDaily will remain alive as a sort of testbed for new online video technology (like its current user-ranking feature), which may then be also rolled out to Roo’s customers, a list that currently includes Verizon and several News Corp. entities.
The New York-based MVD, which had been a customer of Roo’s video feeds (which include content from big-name providers like ABC, Fox, AP and Reuters), built a downloadable application they call a video “jukebox” that sits on a PC and provides categories of video data that users could pre-select. Roo’s Petty said MVD’s applications could help Roo increase its business model, which is simply to provide turnkey video-viewing services to big media sites, like newspapers, who may not have that kind of expertise in-house.
“The benefit to us [of buying MVD] is that we can roll those features out to the remainder of our network,” said Petty, whose Roo competes with other hosted-video network plays like Brightcove. (Roo, which trades on the NASDAQ OTC bulletin board, is currently worth $2.70 per share.) While MVD claims to have had 750,000 downloads of its app, MVD CEO Rob Price didn’t provide exact figures as to how many people use the service regularly, or how many videos MVD served up per day.
Roo’s Petty said that new features like ratings, sharing or creating saved video lists may help providers like Roo grow their businesses, and it doesn’t take much to add to the bottom line.
“Take someone like The Sun — if we can get their users to click on one more video a day, that’s potentially a few million more ad-supported views,” Petty said. Could be worth the whole 350K, right there.