Looks like AOL and IAC both want a piece of video search.

Brightcove, an Internet television startup that helps programmers syndicate shows across the Web and collect money from it, plans to announce on Tuesday it has attracted new high profile investors including AOL and IAC/InterActiveCorp, and a distribution pact with AOL.

Jeremy Allaire, known for making Macromedia Inc.'s Flash software one of the most popular formats to view video online stated "We're talking about the open distribution of video programming over the Internet," Allaire said. "It's about aligning content with audience sets."

And the business model?

Program owners that upload videos to Brightcove's servers can simply opt to let Brightcove attach a 15 or 30-second commercial to their videos. Brightcove takes an estimated 30 percent cut of ad sales, according to Forrester Research estimates.

Advertising-supported videos will cost program owners nothing to use the service. Advertisers are charged $25 per 1,000 viewers, a higher rate than the average $16 to $20 fee charged on broadcast television, analysts said.

From Bloomburg:

Shares of Time Warner Inc., the world's largest media company, rose as much as 2.4 percent after the New York Post said the company is in talks to sell a stake in America Online to Microsoft Corp.

Microsoft, the world's biggest software company, would pay New York-based Time Warner an unspecified amount of cash for a stake in AOL and combine it with its Internet unit, MSN, the newspaper said, citing two unidentified people familiar with the situation.

Currently Google powers AOL search and provides AdWords ads to AOL.com. Google's stock is only down a few points on a day with their secondary public offering and this story spreading. I can't explain why the stock is not dropping further.

MSFT might be spending some of their 37 billion to buy the pieces they need to be a search contender. LookSmart's stock has been inching upward all month long as well.

With Ask developing their own in house ad sales network and MSN potentially gobbling up AOL it looks like Google may end up losing a huge amount of their ad syndication. Lucky for Google they have built Google.com into such a large destination site. In The Search John Battelle mentioned the biggest problem with the Overture business model was their heavy reliance upon partners.

One thing MSN has to look out for is their own walled garden approach, which was a large part of what was the original demise of AOL.

The original New York Post article [sub req] also states:

Talks are most advanced with Microsoft — Time Warner management's preferred partner — but the media giant has also had discussions with both Yahoo! and Google over a sale or venture with AOL, according to a source close to Time Warner.

Interesting times ahead.

MSN Search Out of Beta:
Some people are seeing it flip back and forth, but I have been seeing the Beta results at the main site.

AOL to Join the Fray:
John Battelle writes about how AOL is building bolt on search products. Were the walls up too long? Is it too little to late?

How Much Can You Automate:
Jason Duke starts off what will probably amount to a fairly interesting automation thread at ThreadWatch.

With a perpetually declining user base AOL must find a way to diversify their business model.

Here's one...

Advertising.com is a large ad network with over 800 customers. They are now to be a part of AOL...