MENU

Newsroom

Keep up with the latest press releases and insights from RhythmOne.

blinkx leaps as it adds e-commerce revenue

Shares in blinkx, the video search site spun out of Autonomy three years ago, leapt after it reported its first half-year of operating profitability.

It also revealed details of a new e-commerce technology that will allow consumers to save money during online shopping and give blinkx a new source of revenue.

Revenues for the year to March 31 increased by 142 per cent to $33.7m, although pre-tax losses narrowed only marginally to $8.5m. Losses per share fell from 3.19 cents to 2.94 cents. Analysts at Citigroup said blinkx had exceeded their forecasts for revenue and operational profit.

In the second half of its financial year, blinkx recorded its first earnings before interest, taxation, depreciation and amortisation, at $30,000.

blinkx shares closed up 6¼p, a rise of almost 50 per cent, at 19¼p. The company’s initial public offering in 2007 was priced at 45p.

Suranga Chandratillake, chief executive, said that was “transformational” for the company. “It de-risks the company from an investment point of view.” Although sales and marketing costs rose by more than a quarter, Mr Chandratillake said investment in this area was “tapering dramatically” as advertisers became more familiar with its platform.

blinkx.com now processes more than 22.6m searches every day, more than double the quantity a year ago. That is attracting more advertisers, with repeat campaigns from BMW, Microsoft and Stella Artois. The popularity of video clips of cars and health information have encouraged advertisers from the automotive and US pharmaceutical sector, Mr Chandratillake said.

Alongside profitability, blinkx is also starting to deliver on another of its early promises: a technology it dubs “transaction hijacking”. It has begun testing “Cheep”, which Mr Chandratillake described as real-time community shopping. After installing an add-on to their web browser, users are alerted if cheaper deals are available elsewhere when they move to buy a product online.

A central Cheep site gathers shopping data, including pricing and reviews, from all of its users, who can choose to be anonymous or broadcast their purchases.

Cheep is the latest in a cluster of new web services which allow people to broadcast more information about themselves online, from Twitter and Facebook to Foursquare, which shares location data, and Blippy, which reveals credit-card purchases.

“We will definitely be able to benefit from that trend of people sharing more information,” said Mr Chandratillake. “But the product fully works even if just a few people share their information.” While it may eventually be able to generate revenues by selling data about live trends and popular products to retailers, blinkx will initially make money from Cheep though advertising and referral fees. blinkx also launched a new mobile site, to capitalise on the popularity of smartphones such as the BlackBerry and iPhone. “It’s very important that we have the right beachhead products, even though the audience is fairly small, and the advertising market nascent,” said Mr Chandratillake.

Citigroup forecasts revenues to double again in the current financial year to $58.3m, with ebitda of around $9.6m.