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blinkx, Video star

blinkx, the Aim-listed online video search engine, may be a tiddler in the world of search engine giants, but its latest moves have seen it snapping at the heels of Google and Yahoo!

With five million searches a day, it recently outstripped Google Video in Britain – an impressive feat for a company that is little more than a year old.

It boasts 26 million hours of video and more than 350 partners around the world, including Channel 4, the BBC and YouTube.

blinkx’s revenue comes from sharing any advertising revenue generated by a site when it displays a clip found by blinkx’s engine.

Suranga Chandratillake, the group’s founder and chief executive, is determined to expand and believes he has found a shortcut. Today the company said it had made an initial approach to buy Miva, the US search-based advertising network, for $41 million.

The fit would be good: Miva has the internet traffic blinkx wants (it is predicted to generate $140 million in ad revenue this year compared with $17 million forecast for blinkx) but the UK company has the advanced technology it needs.

It is an opportunistic bid. Miva’s shares have fallen almost 90 per cent in the last year, partly because of its underinvestment in technology.

Where blinkx differs to other companies is that rather than just searching titles of videos, it is able to “listen” to clips using its unique technology, which converts speech into text. This means better quality searches for consumers but also more targeted, and therefore more valuable, advertising for companies. It also tracks ads and can tells companies how many people have clicked on them and whether they made a purchase.

blinkx’s shares were up 10.25 per cent, or 3p, at 32.25p,

This is more than double their value last month, when they fell to 15p, but the stock has fallen 36 per cent since the company’s listing, at 45p, in May last year.

The acquisition would be a coup for blinkx and help its goal of breaking even by 2010, but it is early days and, with Miva’s shares so low, a counter offer cannot be ruled out.