Freston, Dolgen invest in Veoh

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Former Viacom president and CEO Tom Freston has joined a growing list of investors in Internet TV service Veoh Networks.

Freston, who was ousted by Viacom a year ago, took part in the company's Series C funding, which closed last month, via his Firefly3 firm.

Veoh received $25 million in its third round of funding, with Goldman Sachs as the lead investor. Expedia director and Viacom adviser Jonathan Dolgen, chairman and CEO of Viacom Entertainment Group from 1994-2004, also participated in the latest round.

This group joins Series B Veoh investors Michael Eisner's Tornante Co., Time Warner and Spark Capital, which raised $12.5 million for the company ending in April 2006. Shelter Capital Partners is another major investor in the service, which launched in beta in February.

Veoh CEO Steve Mitgang, who replaced founding CEO Dmitry Shapiro in July, said that he's been encouraged by the "great spirit" that the more traditional media players have shown in working with newer online video platforms.

"It's not new technology versus the old models," Mitgang said. "These guys recognize that there's a breadth of things that consumers want to watch and great technology and new premium content that need to come together. They're interested in helping us build those bridges."

Last month, Veoh, which hosts content from Paramount Pictures, Lionsgate, PBS and National Lampoon, said that it had 18 million unique users, up from 4.4 million in February.

Universal Music Group sued Veoh last week, alleging copyright infringement. Universal had threatened a suit against Veoh in August, leading the Web TV service to preemptively sue the record label.
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