Microsoft Taps YuMe to Handle Remnant Video Inventory Online

Online ad network YuMe has struck a deal with Microsoft to manage and sell all the software giant’s remnant video inventory online.

The deal allows YuMe to package and sell Microsoft’s unsold video through its network of channels, which advertisers can buy based on subject category (news, entertainment, sports, etc.). The deal will take effect later this summer. Financial terms were not disclosed.

Jayant Kadambi, CEO and co-founder of YuMe, characterized the deal as a validation of the upstart network’s approach to video, and the strength of the online video market in general.

“There is a general philosophy that there isn’t enough video to advertise against online,” he said. “Well, our video network has grown pretty large, large enough now that we can give the advertising community what they really want, which is to reach the online video audience at scale.”

Launched a little over a year ago, YuMe’s network claims more than 400 Web sites, 150 million-plus video streams and 46.9 million unique visitors. The network focuses on professionally produced content rather than user generated videos coupled with a sophisticated approach to targeting, said Kadambi. This is not user-generated content, he said, but rather “premium, independent, professional productions” that producers are looking to monetize.

Advertisers will have the choice of pre-roll, post-roll or overlay ads on the Microsoft inventory. “We try and let advertisers run whatever ad format they think is best for their campaign,” said Kadambi. “We let advertisers petty much run everything.”

The move comes just weeks after the most recent collapse of Microsoft’s bid to takeover Yahoo, and could provide a glimpse of the Redmond, WA-based company’s approach to online advertising now that such a deal is unlikely.

“In working with YuMe, we will further maximize the value of our unsold video inventory,” said Rob Bennett, general manager, MSN Entertainment, Video & Sports, Microsoft, in a written statement. “YuMe offers the ability to connect additional ad networks to its platform, and we plan on utilizing this service to provide YuMe and other ad networks access to Microsoft’s unsold video inventory.”