The social network application developer is expanding on its Facebook wall application, FunSpace, by launching premium content channels. Will this mean ads will start popping up on your Funspace wall?

Slide announced content partnerships with CBS, E! Entertainment, Warner Brothers and Hulu which is a joint venture between NBC and News Corp. The company plans to launch FunSpace Channels for users to watch and share clips this coming Thursday.

While online video consumption has grown dramatically in the last few years, companies are still struggling to turn a profit in the niche. The dominant player in this market is Google’s YouTube which is still struggling to monetize its free user generated video content.

However, Slide’s FunSpace audience represents over 20 million users on Facebook as the third most popular application on the social network. Slide already allows you to send YouTube videos to friends and has seen users share over 5 billion videos so far.

As of yet, the only revenue that Slide is making from the FunSpace application is one banner ad on top of the users’ wall application. It’s doubtful that the sole ad is making much profit for the company, which has now burdened itself with licensing fees to these major media outlets.

The question on many users minds is whether they can expect to start seeing video ads along with the premium channels on FunSpace. These ads often force users to watch a short commercial before they are able to see the actual video and are not terribly popular among video consumers.

While this model of building a large audience before more aggressive attempts to monetize the business is not a new model on the Internet. However, the brisk competition between FunSpace and other applications such as SuperWall means that Slide must be careful not to drive its users to other tools.

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Entry was posted on Wednesday, October 1st, 2008 at 8:55 am under Online video, Social Media.

Read more entries by Dave Jeyes.
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