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The next disruptors

THE DISRUPTOR: Blinkx

THE DISRUPTION: Web video search and ad insertion

THE DISRUPTED: Search engines and the TV ad business

The largest segment of Internet advertising, thanks to Google, is search. And the fastest-growing segment is video. San Francisco-based Blinkx believes that by putting them together, it can create a business that is greater than the sum of its parts. Blinkx is a video search engine that indexes more than 14 million hours of video available on the Web, everything from YouTube clips to old episodes of Seinfeld. Blinkx’s special sauce - something even Google doesn’t have - is software that can turn speech into text and count how many times a word pops up in a video. This is very useful to anyone selling targeted ads for, say, Junior Mints. Blinkx can also cluster videos together by topic.

In June, Blinkx announced a video advertising service called AdHoc, which CEO Suranga Chandratillake, borrowing a phrase from Google’s business model, describes as “AdSense for video.” The ads can take many forms: clickable “bugs” that crawl across the screen, banners that appear around the video, and, perhaps most innovative, a list at the end of the video of all the products mentioned in it. This fall Chandratillake will try out the ad system in his own peer-to-peer Internet video service, Blinkx Broadband TV.

Blinkx faces some formidable challengers: Google (Charts, Fortune 500) and Yahoo (Charts, Fortune 500) have not given up on video search. But video is a different beast than the rest of the Web, and Blinkx has shown that it knows how to hunt it. If Blinkx can stay ahead of its giant rivals, it could one day take on regular TV. “It is only a matter of time before cable and satellite providers let you forage beyond the set-top box,” Chandratillake says. “When that happens, you will need a really good search engine.

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