MSN/Live Surges to Second Place in Internet Video Market

This month’s online video stack-up saw a major reshuffling with three of the top five players trading places amid heavy shifts in traffic. YouTube continued to outperform the market, growing 1% in October to 213 million visits on nearly 52 million unique visitors. The Top 20 video sites as a set contracted 6% in October.

click to enlarge

Extraordinary gains were realized by the Microsoft (MSFT) family of video sites, which includes MSN Video and Live Search Video, catapulting the Redmond rival into 2nd place, three spots ahead of its rank in September. MSN/Live Video grew 25.3% to 35 million visits on the strength of 21 million visitors.

Meanwhile, major losses struck Yahoo! Video (YHOO), MySpaceTV and Heavy.com. MySpace’s decline is particularly troublesome given that it’s the 3rd straight month of double-digit losses for the social networking giant. Since July 2007, MySpace has seen its online video market share halved to 7.6%.

At Yahoo! Video, unique visitors held relatively steady while visits declined 27.5%. The drop indicates that visitors to Yahoo! Video were less inclined to return than they were in September and August.

While not as bad, the situation is complicated at AOL. The video sections saw unique visitors increase by 600,000 or 4% in October, but visits actually decreased by 9.4% to 30M. AOL has held remarkably steady as the 4th place online video competitor since July, but this discrepancy could be an early warning sign of growing visitor dissatisfaction.