News Corp. and NBC Universal will challenge Google's YouTube for online eyeballs and advertising pounds by launching a video-streaming Web site by the third quarter of 2007.
Through a promotion deal with AOL, Microsoft's MSN, MySpace and Yahoo, the new site will reach 65 million viewers, News Corp. said.
Free content will be supported by advertising by among others, Cadbury Schweppes, Cisco Systems, Esurance, Intel and General Motors. News Corp. and NBC Universal will also try to create an interactive Web community by inviting users to create personalised video playlists, mashups, online communities and a video-search function.
In contrast to the amateur clips available on YouTube, the new site will give consumers professionally produced video, said News Corp. President Peter Chernin in a statement. The site will offer a library of premium content from a dozen networks and two film studios. The partners have not announced the site's name or management, but said that its transitional leader will be George Kliavkoff, who is currently NBC Universal's chief digital officer.
Rather than pull viewers away from its partner portals such as AOL, the site will feed its video to them. That design will allow viewers to play videos without leaving AOL's site or even opening additional Web browser windows, according to a statement by AOL spokeswoman Anne Bentley.
AOL also played down the brewing rivalry with YouTube, saying that YouTube owner Google also holds a five percent stake in AOL. So both companies will benefit as AOL draws a portion of the advertising revenue generated by the new site, Bentley said.