Years after it was originally supposed to arrive, Internet video is here and making up for lost time. Steve Jobs has made it the focus of Apple Computer's new strategy. Nearly every major media outlet is obsessed with figuring it out. And video file-sharing site YouTube, non-existent two years ago, now has buzz rivaling that of the original Napster.

So it makes sense that ad dollars should follow the new medium. Market research firm eMarketer predicts that U.S. online video advertising is expected to total $385 million in 2006, up 71% from a year ago. That's more than twice the growth rate of overall U.S. online advertising spending, which is projected to reach $16.7 billion this year, up 34% from last year. Online video advertising could hit $1 billion by 2010, says JupiterResearch.

But advertisers and Internet video aren't a perfect match yet. The main problem: While Internet users now seem happy to watch clips on their computers - a recent poll says that half of them have done so - they may not be watching the kind of stuff that marketers want to buy ads on. YouTube boasts that it has stored 100 million video clips on its site, but the anything-goes nature of them - home-brewed stuff mixed with clips of copyrighted, unauthorized material - makes some advertisers wary. Meanwhile, professionally produced content you can find at established Web sites has a harder time drawing eyeballs.

"Advertisers and Web publishers have been waiting for consumers to watch - it's been a pretty slow build,'' says Jeff Lanctot, vice president and general manager of Internet advertising agency Avenue A/Razorfish, a subsidiary of aQuantive. "The interest and demand of online advertisers has outpaced that of online consumers."

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