Microsoft has struck an online video advertisement deal with Redwood City, California-based startup ad  network YuMe that will that will see the Redmond, Washington-based software giant use YuMe as a backup to serve online ads for its unsold inventory, the two companies announced late Sunday. The agreement builds on a September 2007 advertising partnership that saw YuMe provide services to Microsoft's Interactive TV, however the scope of the new agreement was not immediately available, nor financial details of the partnership. After Yahoo Rebuff, Microsoft May Look To Smaller Ad Deals In what may be a glimpse into Microsoft's online advertising future, the partnership, which the companies said would begin this month, was seen as an attempt by the world's largest software maker - freshly reeling from last week's failed talks with Web pioneer Yahoo after four months of off-and-on negotiations - to gain a more sizable portion of the online ad market. The deal will see online ads served by YuMe, which vary from overlay to pre-roll and post-roll formats, among others, run on assorted Microsoft Web properties such as sports and entertainment MSN channels when Microsoft cannot meet the demand to provide ads itself, such as during the peaks in ad-serving utilization that can occur during breaking news stories. "In working with YuMe, we will further maximize the value of our unsold video inventory through YuMe’s robust platform for video advertising network management," said MSN Entertainment general manager for video and sports Rob Bennett, in an announcement issued Monday by Microsoft and YuMe. The agreement will see Microsoft provide YuMe with access to its stock of unsold video, which will improve services for advertisers, Bennett said Monday in the joint announcement. "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," Bennett said. Microsoft Joins YuMe's Other Major Partner NBC Privately-held YuMe, which launched just over a year ago with backers including DAG Ventures, BV Capital and Accel Partners, has specialized in displaying targeted ads on both streaming video content and on downloaded  video material through the use of an application program, the company said. On Monday YuMe chief executive and co-founder Jayant Kadambi noted the significance of obtaining the backing of Microsoft. "YuMe brings a best in class video advertising platform and sales team to Microsoft to immediately monetize excess video inventory on Microsoft properties," Kadambi said. "Our selection by Microsoft is testament to both our technology’s strength and our expertise in helping publishers best monetize their content and advertisers best reach their desired target audience," he added. Microsoft will join NBC Universal's NBC Direct property, another of YuMe's major Web publishers, in using the video ad serving specialist's NetworkMe program for combining video content, competing against rivals that include ScanScout and Adap.tv. YuMe said that its network of over 400 Web sites combines to serve 46.9 million unique visitors with more than 150 million streams of video content. Microsoft was the fifth most popular Web video property among United States Internet users during May, with about 25 million unique visitors according to Reston, Virginia-based Web traffic analysis firm comScore. Microsoft Signs Video Network YuMe As Standby Ad Provider YuMe said that its advertisers can choose online video ads targeted by the type of video, such as news or  sports, and by audience type. Whether the agreement announced Monday with YuMe can help Microsoft gain a larger share of the online advertising market remains to be seen, however suffering a rebuff last week from Yahoo, smaller deals such as this may be a sign of Microsoft's future strategy. Yahoo announced Thursday that it had signed a long-term search advertising agreement with Internet giant Google, and that it had rejected a proposal from Microsoft, announcements that combined to essentially signal an end to the software giant's 18-week pursuit of Yahoo. "Our network now reaches over 65 percent of the U.S. online audience; comprises over 120 million unique visitors and continues to offer real scale for targeted, premium ad spending in the U.S.," Kadambi wrote Sunday in a message on the YuMe company blog. Related Links:
| 
