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Veon foresees adverts without end

Online video can be transformed into a never-ending commercial. At least that's the aspiration of San Francisco-based Veon, which this month is rolling out technology that advertisers can use to weave commerce links directly into video clips.

Online video can be transformed into a never-ending commercial. At least that's the aspiration of San Francisco-based Veon, which this month is rolling out technology that advertisers can use to weave commerce links directly into video clips.

It's a system that allows viewers to click on merchandise that appears in entertainment programming online, connecting them automatically with Web sites selling the products that appear on-screen.

"Streaming media alone is powerful and exciting for users, but there's no real business model behind it," says Joanna Shields, president of Veon (www.veon.com). "The question is, how do you begin to commercialize this opportunity?"

The answer for Veon is to offer technology that makes it possible to convert Web-based video into an interactive stream of selling opportunities that can be woven into the programming that users watch online.

"Many people think of this kind of application as something for the realm of interactive TV," Shields says. "But based on user patterns, this is something that can have applications in the broadband world today."

Veon last week unveiled a deal with America Online (www.aol.com), which announced plans to incorporate Veon's player software into the user interface AOL is developing for users connecting to the AOL service via high-speed lines.

The pact marks the completion of a transformation to the Web environment for Veon, which got its start developing similar video publishing systems for use by compact disc developers. The new Veon system integrates the company's existing publishing tools along with server software and systems that help marketers track the performance of their video ads.

While users with speedy connections make up only a fraction of AOL's subscriber base of 20 million, the deal will help Veon in efforts to persuade developers to create interactive content made for the Veon system, according to Shields. "Suddenly, developers know that there will be an audience for content that they create using our technology," she says.

In addition to creating clickable sections within video streams, Veon's publishing system makes it possible to build content offerings that can be programmed and synchronized to appear in the browser alongside a video window. As a result, a retailer, in theory, could post a flashing on-screen message encouraging users to buy a specific product at the same time a commercial promoting the product is running on the video screen.

"We see a host of new revenue opportunities for distributors of online video content," Shields says.