Last week, AOL bought for $405 million.

If the history of online video is any indication, then right now, in management meetings and boardrooms, executives and investors are asking themselves: “What the hell does do — and how can we change our business to do that?”

Critics blast VCs for suffering from herd mentality before they invest money.  That’s unfair for two reasons.  One, VCs suffer from herd mentality after they invest as well.  Second, executives and entrepreneurs are just as bad.

Let’s go back down memory lane.  When Google acquired YouTube for a jaw-dropping $1.65 billion a mere eighteen months after its three founders registered the URL, a battalion of competitors like MySpace (who sought to enter video in a big way after first making inroads in social networking) and Hulu wanted to emulate the popular video-sharing site, even though there were countless YouTube competitors who had their hands full such as Metacafe, DailyMotion, Revver, Guba, and Break.  In the end, to quote Jack Welch, the #1 and #2 players were relevant and everybody else was not.  Today that means YouTube and Hulu.  Most of the others have shut down, stalled, or plateaued, although DailyMotion has managed to hang on fairly well, to its credit.

Then, a couple of years later, AOL spent $65 million to acquire 5Min.  Unlike YouTube, which aggregated content and featured the videos on its site, 5Min licensed content from hordes of content owners and then bypassed the own-and-operated website in favor of a wholesale distribution strategy of distributing the content on thousands of other sites.

We were (and are) a relatively large supplier of content to 5Min.  The day after AOL acquired 5Min, countless aspirants contacted us to license content, because they too wanted to offer publishers and advertisers a similar offering.

While it’s natural to be envious of 5Min’s fate, none of those calling us were listening to hockey legend Wayne Gretzky’s advice to “skate where the puck is going,” as they were all looking back.  In the end, those who sought to emulate 5Min either hit a wall or missed the next opportunity.

Monitoring the trends that draw the attention of many players in tech, advertising and distribution, we’ve seen that in many discussions, one of the companies that would come up was  Was an ad server?  An ad network?  Or an ad exchange?  Admittedly, was doing a bit of everything while focusing on the big online video opportunity.  Today we’ve grown accustomed to the term programmatic buying, which to’s credit is where the company’s strategists “skated to,” especially against the backdrop of their $405 million sale to AOL.

While it’s easy to criticize companies that — pardon the pun — adapted to market opportunities, was opportunistic enough to extend and expand its offerings to eventually finally capitalize on programmatic ad buying.  M&A is like catching lightning in a bottle, rarer than an eclipse even, in that it’s hard to predict its occurrence.  For what it’s worth, expanded and timed its evolution to hit the jackpot, although other cynics would point out that had Tremor or YuMe boasted more demand in their IPOs, would not have sold now (although the companies are not in fact identical).

However, it’s worth noting that focus is only important if you focus on 1) the right opportunity 2) at the right time.  Otherwise, you may be headed in the wrong direction.

Either way, I expect a barrage of companies to adapt their strategy and execution in order to emulate, even though YouTube and 5Min’s (and their respective segments’) post-deal history would suggest that the window on this segment has likely closed or is closing for new competitors, and it’s best to set their sights on where the puck is going — not where it’s been.