With a Lifeline to London, Blinkx Builds the World’s Largest Video Search Index

11/30/10Follow @wroush

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every angle: it uses speech recognition algorithms to create a transcript of spoken words, it uses computer vision techniques to understand in a general way what’s being shown, and it extracts metadata such as closed-captioning information.

Today, Blinkx’s spiders constantly crawl the Web for new video, and the company also receives a constant flow of video from 720 content partners, from media giants like NBC Universal and Fox to small independent producers. If you initiate a video search at Blinkx.com or any Blinkx-powered site such as Ask.com, you might get a result from the general Web, in which case you’ll zoom off to a third-party site, or you might find a video owned by one of Blink’s partners, in which case Blinkx gets a cut of the advertising revenue generated by your view.

That’s one of the main ways the company makes money. It also has an advertising-placement platform called AdHoc, which leverages the company’s understanding of videos in its index to match them with relevant pre-roll or overlay ads. Like Google, Blinks also sells sponsored video search results, primarily to content owners looking to boost their video ads into viral territory. Then there are the licensing fees Blinkx collects by letting other sites plug into its search index (although those fees only kick in above a certain threshold—a “few thousand” searches per day, Chandratillake says). The most common search licensees: newspaper website publishers who want to show lists of relevant Web videos alongside text article, to keep visitors on their sites longer.

Thanks in part to a jump in the average size of its advertising deals, and in part to a 107 percent increase in the amount of online video available in the US between September 2009 and September 2010, Blinkx earned $27.4 million in the second half of the 2010 fiscal year—which was more than double its revenues from the same period in 2009.

Blinkx 'Video Wall'“What we’ve begun to realize is that the real asset we’ve built is this amazing index, which is available through a very powerful search technology, so that you can express what you want and easily get a relevant response,” says Chandratillake. “The newspaper idea came from them, not from us. We’d always focused more on the pure video search model, but we tried it out and realized that for any given article that a popular newspaper publishes, we have hundreds of relevant videos.”

Blinkx has never raised any venture backing; its root within Autonomy meant it didn’t have the usual up-front development expenses. But by early 2007—around the time the company won the “Demo God” award at the annual Demo conference—the company realized it would need to raise money to keep growing, Chandratillake says. None of the potential venture and private-equity investors the company met with seemed to be a good fit. “Some were offering a valuation that we didn’t think made sense, others had their own vision of the technology and where the company should go,” he says. “We just didn’t see eye to eye.”

So Chandratillake chose a path that’s become rarer and rarer for startups: an initial public offering. But not on the NASDAQ or the New York Stock Exchange, which would have been … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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