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Video search engine provider (and Autonomy spin-out) Blinkx, who has been stunning the market with its momentum (including a near doubling of revenue in the half year to March 31, see Blinkx exceeds), is making its second major acquisition of the year as it capitalises on the power surge in video advertising.
It is acquiring Prime Visibility Media Group (PVMG), an online advertising network and marketing agency providing a gamut of services including search engine marketing and optimization, social media marketing, and marketing performance measurement. The $36m (£22.4m) deal is a big investment for the company whose half-year revenue was $66.1m. It will be funded via a new placing of shares and from cash funds. PVMG’s results for the year ending December 31 2010 showed revenue of $29.9m and a net loss of c$390k. Blinkx’s other purchase this year was the $30m Burst Media deal, completed in May.
With two major purchases, the company is going all out for growth and is in a sweet spot as advertisers question the value of ‘traditional’ online advertising and look for something fresh. Although online advertising is still bringing in the money (see Google gleeful over Q3), its mid to long-term growth prospects are uncertain given audiences’ desire for fresh experiences. Providers who can support video are well placed to prosper. Blinkx plans to integrate PVMG's platform with its own to enable the Blinkx video search engine to respond to a portion of PVMG's 1.5 billion daily queries with relevant video results and pair them with rich media video ads that typically monetise at a higher rate. Given the combination of market change and Blinkx’s heritage, we expect to see a lot more activity from this company.
