Sony Pictures Entertainment has purchased Grouper Networks Inc., a 26-person online video sharing Web site established two years ago, in what is the film giant's first move into providing Internet content provided by users.

The transaction is the largest Web 2.0 sale since Los Angeles-based Intermix Corp., the parent of social network MySpace.com, was purchased by New York-based News Corp. in September 2005 for $580 million.

The deal marks Sony’s entrée into consumer-generated content. It could also furnish the media company with a dedicated place on the Web where it can distribute movies and other professionally produced content, including music.

“It’s a big deal because Sony has a huge amount to gain by picking off one of these consumer generated social media sites,” says Allen Weiner, an analyst at Stamford, Conn.-based research firm Gartner Inc. The first opportunity he mentioned is the ability to distribute content such as movie trailers and television shows onto a platform that is ready-made for sharing via e-mail and social networking. The other opportunity for Sony via this acquisition is to allow users to add clips of Sony’s professionally produced content into home made videos.

Grouper will retain its management, led by co-founders Josh Felser and David Samuel, who co-founded Spinner.com, which was sold to AOL LLC in 1999 for $320 million.

Samuel said the company chose a sale to Sony versus raising another round of venture capital because it furnishes Grouper with the best chance to continue separating itself from the 200 other online video sharing web sites that have emerged in recent years. The startup raised $5.25 million from Duff Ackerman & Goodrich LLC, T-Venture, and angel investors.

Sony and Grouper met two months ago to discuss a business development relationship around the possibility of Gropuer promoting Sony’s video cameras content on its site, according to Samuel. Three to four weeks ago, the talks escalated to sale negotiations with senior management at Sony Picture Entertainment. Rumors emerged last week.

Incredibly, Grouper only launched its dedicated online video sharing service nine months ago. Prior to that, the company offered a general file sharing service that allowed users to share documents, music, videos and other file formats via its peer to peer network. Only when the company decided to focus exclusively on video did its growth rate dramatically accelerate.

“We did adjust the company. We continued to leverage our peer to peer infrastructure but turned it 90 degrees on its head by focusing on the video vertical,” said Samuel. He adds that what separates Grouper from its competitors is its peer to peer delivery network, its device neutral approach to downloading and its APIs that make it relatively easy for other companies to partner with Grouper

The Grouper deal is certain to spur talk about which online video sharing service will be bought next. Despite the flood of venture capital funding pouring into online video-sharing and social networking startups, Grouper is the only Web 2.0 startup that has been purchased for a disclosed amount of money in 2006.

One analyst expects that to change. “I think most big media companies will begin to purchase the better known of these sites,” said Gartner’s Weiner. “They could build it themselves, but this way, they can get in the market more quickly.”

Weiner added that Viacom’s $200 million acquisition of Atom Entertainment earlier this month was partially motivated by its desire to gain control of Atom’s AddictingClips.com web site, which is an online video sharing service. Weiner said, “Grouper is the first pure deal, but you’re going to see lots more.”

Tags: grouper, web2.0, sony, youtube, vc, venture capital.