AOL Preparing YouTube Rival

Further expanding its repertoire of online services as it moves away from subscription revenues, AOL is beta testing a new video hosting service it calls UnCut. The offering appears strikingly similar to YouTube, which has surged into the mainstream as the most popular destination for video on the Web.

Users can upload videos of up to 5 minutes in length to AOL UnCut, which then converts the content into the Flash 8 format like YouTube. Promoting the community aspect of the site, videos can be rated, commented on and shared by users.

Although they are sorted into categories, however, videos cannot be tagged by keywords like those on YouTube. The service is powered on the backend by VideoEgg, which provides the infrastructure for posting videos on sites like MySpace and a number of blog services.

AOL UnCut follows a beta launch of AIM Pages, a MySpace-like service that integrates AOL's vast instant messaging user base with a social networking platform. UnCut is not officially launched, but an announcement is expected within the next week.

"I am seeing an increasing trend of the big guys simply copying what successful startups are doing. AOL with this product and AIM Spaces," commented industry watcher Michael Arrington on his TechCrunch Web log. "The only large company that is even experimenting with unproven concepts at this point is Microsoft with its various Live.com ideas."