Alex Castro of Delve Networks on the Future of Internet Video

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most algorithms, it has a “semantic layer” that tries to understand the meaning of what’s being said, not just match the exact words you’re looking for. So if you’re searching for “touchdown” on a football site, it will return parts of the video that concern people talking about scoring points, big offensive plays, and so forth, rather than just instances where someone says the word “touchdown” (which might also occur in some other context, like tornadoes or airports).

How is the new Delve doing? So far, so good, says Castro. He touts its increased revenue for the first three months of 2009—a 130 percent increase over the fourth quarter of 2008. Delve makes its money through a subscription-based usage model. “When you’ve been on the wrong track and realize how bumpy it is, and then you get on the right track, it’s kind of obvious,” he says. “This is kind of fun. It’s a pretty exciting time. The first two weeks of January were pretty slow, we were worried. But then we blew out the quarter.”

As for the competition in the crowded video hosting space, Castro says Delve is easier to use, cheaper, and more mainstream than offerings from companies like Seattle-based thePlatform and Cambridge, MA-based Brightcove and EveryZing. “We think of ourselves as the Salesforce of video,” he explains. “We’re a next-generation video solution, we leverage cloud infrastructure [Amazon Web Services] to do it better and cheaper, and we can look inside video to provide more value to advertisers and publishers…As the volume of video gets bigger and bigger, I can’t just watch all this stuff. So help me skim through this and just watch the part of the video I care about.”

Delve has 20-some employees and is now focused on growing its customer base. Castro freely admits his startup is smaller and newer to the video hosting space than some of his competitors. “There’s more competition than a year ago. That validates this is a big honking market,” he says. “People who sell picks and shovels will make a lot of money.”

Lastly, I asked Castro what he learned from his work experiences at the two biggest tech giants in town. “What impressed me most at Amazon—I had a lot of exposure to Jeff [Bezos]—was how innovative the company is, how willing they are to take risks. The Kindle and Amazon Web Services have worked out really well. Jeff is someone confident enough to take risks, go down a few blind alleys, and recognize that failure is a way to get to success,” he says. “That culture is a little different from Microsoft. Though I learned a lot of great stuff at Microsoft too.”

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