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The name is blinkx: the special agent for internet video searches

James Bond pulls up in his Aston Martin at the entrance to a luxury Caribbean hotel. As he steps out of the sports car, he hands his keys to the waiting valet and puts on his designer sunglasses.

The scene from Casino Royale, the latest Bond movie, is being watched on a computer screen. And as Bond prepares to enter the resort, the viewer moves the mouse arrow over the screen and double clicks on the spy’s sunglasses. Immediately another window opens on the monitor with the home page of Police, the maker of Bond’s shades.

This new form of interactive video advertising is not some futuristic concept of how we will use the internet in years to come - it is a reality today.

Blinkx, a British company based in Cambridge, hopes to use its technology to become the dominant force in video search and advertising.

Last week, the small outfit, which has just 30 staff split between the UK and the US, said it planned to demerge from Autonomy, its parent company, and seek a listing on AIM, the junior stock market in London.

Consumers can use the Blinkx website to search for videos on the internet, in the same way that Google is used to look for text.

The Blinkx technology, which was developed by Autonomy, combines text, video and audio-recognition software to compile a list of sites in response to a search request.

Suranga Chandratillake, the chief executive of Blinx, said: “It’s an interesting bag of tricks. The software analyses video in several ways. It examines any captions or text on a video. It also listens and recognises words and it looks at visual aspects.”

He added: “Until now, the internet has been a world of text. In the future, as broadband enables faster access of the web, we believe it will be all about video.”

As well as creating interactive advertising capability within online video clips, Blinkx can ensure that banner advertising is relevant to video-hosting sites. So, for example, a teenager watching a clip on YouTube of a surfing contest might see adverts for beachwear.

EMarketer, the research firm, says online video advertising spending in the US alone will increase from $410m (£205m) now to £2.9bn in 2010. This year it is set to grow by 89 per cent.

But the “big guns” of online advertising, such as Google, Yahoo! and MSN, have yet to create search technology that can analyse video effectively.

Blinkx has 111 patents on its technology and Mr Chand- ratillake said he was confident it would not be replicated. “It’s taken $150m to develop the technology and we are considered market leaders in this field.”

The risk remains that the company, which is not due to reach profitability for at least two to three years, will be the target for one of its giant competitors. However, Blinkx could also choose to license its technology to the likes of Google.

Blinkx is set to float next month. EMarketer said recently that a specific factor “that will contribute greatly to video ad spending growth is Google”.

It added: “As the main engine of internet advertising, with its 25 per cent share of the US total in 2006, Google’s major play in purchasing YouTube will mean new models for monetising the scads of video content migrating to the web.”