If behavioral targeting is the great hope for display advertising on the Web, can it work for videos as well? Web video startup Veoh thinks it can and is bringing its behavioral targeting advertising program out of beta today. The ads are targeted at one of nine groups, including viewers interested in action videos, cars, pop culture, sci fi, anime, and family fare.

Veoh groups viewers into these interest groups based on their past viewing, searching, browsing, tagging, and commenting activities on the site. The ad-targeting technology uses some of the same underlying algorithms as its recommendation engine, and were both developed by chief scientist Ted Dunning. He previously built the recommendation engine at MusicMatch (later bought by Yahoo) and credit-card fraud detection algorithms at ID Analytics. The company claims that during the beta, ads that were behaviorally targeted performed twice as good as ads that were not.

Everyone’s trying to figure out how to make ads work on Web video—from YouTube to VideoEgg. A big issue is the quality of the video inventory out there. Many advertisers don’t want to risk associating their brands and products with user-generated video. That includes a large portion of the 100 million videos a month watched on Veoh.

Also, for behavioral targeting to really work, it needs to be done at Internet scale. Veoh not only needs to prove that it can provide better response rates to its video ads, but that it has a large enough inventory of advertiser-safe videos to matter. To do that, it would have to somehow monitor video-watching behavior beyond its own site (which it could do via partnership agreements) and become more of an overall video ad network. It would then have to make sure it doesn’t get tangled up in some of the privacy issues that behavioral targeting for display ads are running into.

Veoh raised $30 million in June (bringing its total capital raised to $70).

Update: Here’s a video interview from BeetTV with Veoh founder Dmitry Shapiro. It is from last month when Veoh announced its last round of funding, but about 1:45 in he starts talking about advertising and how they do targeting. Like everyone, Veoh is experimenting with a lot of different types of ad units (display banners, pre-rolls, post-rolls, overlays, sponsorship, etc.), but says “you just need to be smart about what you show to whom. I think that is really the key in advertising.”

Today, Intel Capital announced new investments in eight startups totaling $60 million. Below is each company, along with the size of the round they just raised. (Not all would disclose when I asked during the conference call). And while Intel led most of the investments it was not the sole investor, so the total adds up to more than $60 million.

Accertify (fraud management for online transactions): $4 million round.

Grid Net (energy management and smart grids for consumers): size not disclosed, but GE Capital and Catamount Ventures also invested.

HealthiNation (online health videos): did not disclose.

Internet Mall (Czech-based online retailer targeting Central Europe): $45 million (28 million Euros).

TOA Technologies (mobile workforce management): $13 million

Veoh Networks (Web video): $30 million

Vostu (Ning-like social network for Latin America): $1.3 million seed round.

Vriti Infocom (education marketplace in India): did not disclose. Intel was the only investor

Is there room for a video-sharing site besides YouTube? Intel Capital, Adobe Systems, and media investor Gordon Crawford are placing their bets on Veoh, which is announcing a $30 million series D financing. Intel Capital is leading the round, and previous investors Shelter Capital, Spark Capital, Goldman Sachs, Time Warner, Michael Eisner and Jonathan Dolgen also participated. This brings the total Veoh has raised to a whopping $70 million.

Veoh wants to move beyond the PC to mobile devices, and is putting a lot of resources behind developing its behavioral ad targeting platform for video.

The announcement also comes a day after Veoh started blocking access to all but 33 countries (plus U.S. territories) in an attempt to focus on the most lucrative markets (and, no doubt, reign in some costs—video streaming is expensive). The countries being blocked, including many in South America, Eastern Europe, and the Middle East, represent less than 10 percent of Veoh’s audience.

That audience, globally, is growing at a nice clip. The company claims 28 million monthly unique viewers, who on average spend 100 minutes a month on the site. And the avreage length of videos watched on Veoh is 10 minutes.

ComScore counts 18.5 million global unique visitors, as of April, and another 8.7 million who watch on the startup’s P2P software client, VeohTV. If you add the two together (the red and purple lines in the second chart below), it comes to 27.2 million, which is about the same as the total reported by the company. That combined total would put Veoh’s audience right below Metacafe’s (28.9 million) and DailyMotion’s (34.6 million).

And it is growing much faster than either one (538 percent over the past year, versus 70 percent growth for DailyMotion and 50 percent growth for Metacafe).

Of course, Veoh and all of these second-tier video sites still pale by comparison to YouTube, which boasted 300 million unique visitors worldwide in April.

Now that I have your attention, Compete has released a list of the fastest-growing (and fastest-declining) sites of 2007. Some of the fastest growers include Veoh, LinkedIn, Reddit, StumbleUpon, Six Apart, and WordPress. Some of the notable sinkers are Bolt, Xanga, Netscape, and Autobytel.

TechCrunch has the distinct honor of taking the No. 5 spot in the fastest-growing list, right behind YouPorn and in front of DateHookup. I am not exactly sure what to make of that. I guess Compete thinks we’re hot.

In another move to strengthen the anti-YouTube coalition, Viacom is syndicating its videos (from Comedy Central, MTV Networks, Nickelodeon, and Atom Films, among other properties) to a whole new slew of video-sharing Websites. The new recipients of Viacom’s video love are Dailymotion, Veoh (which already has Hulu and CBS videos), imeem, GoFish, and MeeVee. They join AOL, Bebo, Joost, MSN, and Comcast’s Fancast in gaining access to Viacom’s video library.

Viacom obviously wants to strengthen the hand of other video Websites against Youtube by spreading its videos everywhere except on YouTube. Viacom has a $1 billion lawsuit against YouTube for copyright infringement and yanked its videos from the site last year. As Comedy Central’s own Jon Stewart said last night regarding his parent company’s lawsuit against YouTube, “A billion dollars? What are they four-year olds?”

I’ve embedded the clip below (which is mostly about the Hollywood writer’s strike) from The Daily Show’s Website. The comment is about four minutes in:

I can remember when OpenHulu launched thinking that the name was nearly false advertising; essentially it provided access to Hulu content away from Hulu, but only to those in the United States. Veoh and MSN have since followed suit and provide Fox and NBC content from Hulu on their sites, but like OpenHulu it still remains IP blocked to those outside of the United States (and possibly Canada).

Web based proxies have been around for a long time, but most don’t work with video, and even those that do don’t provide decent enough bandwidth from which to view content from sites such as Hulu.

One alternative service that has been in use for business for a long time now are Virtual Private Networks (VPNs). VPN’s offer a secure pipe from where you can access the web, and in turn disguise the location of the user on the end connection.

There’s quite a few paid VPN services available, many at reasonable cost ($5-$20/ mth were a few I found on Google) but one service doing the rounds at the moment offers a VPN connection for free.

HotSpot Shield is a plugin for Windows or OS X that offers a free VPN service. There is a catch, it rather annoyingly adds a banner ad to the top of every page you visit, but at the ultimate price point of $0 most people will be able to live with it…well, at least whilst getting access to sites that were currently blocked, and the ads can be switched off on each page, but only after they have appeared.

Does it work? From Western Australia I’m currently listening to Pandora for the first time since May (still a great service.) Earlier this weekend I caught up with a new Simpsons episode, complete with ads from Hulu, then watched archival footage of the Nixon Resignation just for good measure. The only thing it didn’t work on was Joost which told me I should stop using a proxy…no matter, the blocked stuff is mostly on CBS.com anyway, and yes CBS.com works as well.

The speed wasn’t always great, but it was enough to watch video, varying between 600kbps and 1.3mbps on my 2mbps Cable connection.

I hesitated in writing this post because the more people who use services such as HotSpot Shield, the more chances we might end up killing them, or worse still Hulu and others might get smart and find ways of blocking it. Even if we lose HotSpot Shield today I’m betting given the strong demand services like this will have that others will offer VPN services as well, and hopefully free ones at that. At least I hope so, now I have Pandora again I’m really going to struggle if I’m forced to give it up again

Just a day after video-sharing site Veoh added a TV tab with shows from Hulu and CBS, Microsoft did the same thing with the launch of a new MSN Video Guide. (This is really just a new user interface to showcase this content). It too has a TV tab with full-length episodes from Hulu (Fox and NBC Universal shows), as well as CBS. Similar to Veoh, the shows range from Battlestar Galactica, CSI, 24, The Office, and The Simpsons to classics like the A-Team and Miami Vice. All the shows can be watched in an embeddable player on MSN Video.

It looks like becoming a hyper-aggregator of video is becoming hyper-popular, and won’t necessarily be a point of differentiation. Meanwhile, Hulu’s focus on getting hyper-distribution of its videos on other Websites first, and launching its own public Website second looks to be paying off already. Everyone wants to distribute those NBC and Fox videos.

Today, video Website Veoh.com is adding more videos from traditional TV networks, including NBC (The A-Team, The Office, Heroes), Fox (The Simpsons, Family Guy, 24), the Sci-Fi Channel (Battlestar Galactica), the USA Network (Monk), and FX (Damages). All of this new content comes from Hulu, the NBC-Fox joint venture. CBS content was already on the site through a previous deal, but now all videos from traditional TV networks can be found under a new “TV Shows” tab on its main page today, which replaces the “Series” tab. (Video series can now be found in the “Channels” tab).

Founder Dmitry Shapiro tells me this is part of his strategy to turn Veoh into a “hyper-aggregator” of video on the Web, something he already does with his downloadable client, VeohTV, which can show (and download) Flash video from anywhere on the Web. Now he is embedding video players from other sites, such as Hulu, on Veoh.com proper. Says Shapiro:

That is the tip of the strategy—to become the hyper-aggregator. We will continue to provide a breadth of content. Embedding third-party players will be extended to other offerings, including other video-sharing sites.

He even plans on adding videos from rivals YouTube and MetaCafe because he thinks the way to survive is to become the one place where people can find videos from allover the Web. Shapiro also shared some internal stats with me.

—From November, 2006 to November, 2007 worldwide unique monthly visitors to Veoh.com grew 760 percent from 2.5 million to 21.5 million. (comScore measures 3.5 million in the U.S. and 13.4 million worldwide for November, 2007. Quantcast measures 6.7 million in the U.S., and 18.4 million worldwide).
—In November, 2007, Veoh served more than 30 million hours of videos.
—The average user watches 80 minutes per month, even with advertising.
—VeohTV has 2.5 million active viewers (also, as of November).
—Only 40 percent of Veoh’s audience is in the U.S.
—40 percent watch during early evening and during prime time (i.e., Veoh is stealing attention away from traditional TV).