blinkx Eyes New Revenue Stream From Smartphones
LONDON (Dow Jones)— Online video search engine blinkx PLC (BLNX.LN) Wednesday outlined plans to tap in to new platforms like mobile phones and television, and said the shift to these new frontiers should continue to drive revenue growth.
The firm sources videos from the entire worldwide web, searching videos across sites like Google Video, YouTube and MySpace.
While the company’s focus until now has been online, it announced Wednesday the launch of a new mobile video search site, prompted by a surge in demand for mobile video content, and said it wants to roll its service out to other forms of technology for which it could possibly charge higher prices.
“These are new frontiers that we think are extremely interesting,” Chief Executive Suranga Chandratillake told Dow Jones Newswires Wednesday.
“Smartphone use has grown at a phenomenal rate and big brand advertisers need to advertise through mobiles,” he said, adding that televisions are now also starting to offer Internet access, often through things like games consoles.
“I think we can add a whole new addressable market to what we do. It’s the same concept and platform but to a whole new bunch of people,” Chandratillake said.
Earlier Wednesday blinkx posted a narrowed fiscal 2010, ended March 31, pretax loss of $8.9 million from $9.3 million a year earlier, which bettered analysts’ consensus expectations.
The improved performance followed a swing back to the black in its second half, when both revenue and gross profit climbed almost 60% from the first half.
Revenue more than doubled to $33.6 million from $13.9 million a year earlier, as more and more people used blinkx to search for videos online. blinkx is confident of meeting analyst expectations for positive earnings next year.
Citigroup analyst Thomas Singlehurst expects blinkx to make fiscal 2011 earnings before interest, taxes, depreciation and amortization, or Ebitda, of around $9.6 million.
Chandratillake said blinkx was the second-fastest growing video site last year in the U.K., behind only Facebook.
Despite last year’s recessionary environment, Chandratillake said blinkx was able to hold advertising prices due to the targeted nature of its AdHoc advertising platform, which delivers brand advertising in online video.
“I think the targeted nature of what we do should enable us to at least maintain prices this year,” he said.
A boost for the company is that it expects to be able to charge a slightly higher price for advertising through smarthphones.
“Advertising through mobiles is typically more expensive than web because you get more targeting opportunities as you can pretty much pinpoint where someone is through their phone,” Chandratillake said.
At 0915 GMT, blinkx shares were trading up 3 pence, or 23%, at 16 pence,outperforming a 1.7% fall in the Dow Jones Smaller Companies index.