Anyway, instead of focusing on that - and a plethora of other things that content producers wanted - Video Egg took a few bizarre turns, doubling up on user-generated content (Video Egg powers a lot of social networking sites that run video content that most advertisers are not interested in) and then diving deep down into social media by billing itself as a Facebook ad network.

I gagged, but did not say anything. Others were not as kind.

Today Video Egg bragged about generating a whopping $1.5M over the past five months, as Mashable points out, that is a pittance relative to News Corp.’s Fox Interactive Media, who powered on MySpace’s awesome growth will do some $800M in revenue this year (disclaimer: WatchMojo.com is a content provider on MySpace TV).

What does this all suggest? Don’t jump of freaking bandwagons!

The Facebook bandwagon has been on turbo and it’s not surprising to see so many companies position themselves for it, but despite Video Egg’s best efforts, the effort only generated $1.5M. Had they focused more on the real deal (ie. video) they would have done better.

Surprising to see big-talking VCs take their eye off the ball and focus on the low hanging fruit that is social networks’ real estate… the real money is in video advertising on professionally produced video content for the Web. But don’t take it from me, check out the stats.

If indeed Video Egg’s Facebook-play is a mere sliver of their whole business (which I suspect it is) then they need to get over the flavor du jour strategy and drive that point home, otherwise, Video Egg’s competitors will eat their lunch.

Either way, Video Egg is backed by some of the smartest money out there, and the management team is pretty smart too, but am I the only one who is thinking of Bolt.com? Bolt.com was a media company leading a strong vertical, then it suffered from YouTube envy (ie. got greedy) and dived into user-generated content. Problem was Bolt.com got sued, sold to GoFish, that went nowhere (cause GoFish lost 90% of its value) and today Bolt.com is a mere flash in the pan.

Video Egg probably won’t fare so bad, and in fact, should do well… but they should recognize what the real opportunity is and drop the Facebook envy.