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blinkx Buys Burst Media To Chase Higher Video Ad Rates

Video index and ads firm Blinkx is buying up UK ad tech vendor and network Burst Media for $30 million (£18.5 million).

The rationale? A host of buzz phrases: “blinkx will create contextually relevant video channels for Burst’s network of publishers, thereby aggregating an online video audience for advertisers across long tail internet sites, which will rival the scale of television networks,” according to the announcement.

Translation: blinkx has bought Burst to serve blinkx’s own roster of videos, which come with advertising, through Burst’s own network of publisher sites. blinkx reckons it can now get higher CPMs for its ad sales because of the larger scale.

blinkx says Burst’s 2010 video CPMs were $1.49 while its own were $20. Burst’s network claims 130 million monthly uniques. blinkx has now ingested over 35 million hours of video from third party owners, against which it serves ads. The connected TV space will be its biggest opportunity.

blinkx says Burst will have revenue of $33 to $34 million. So this acquisition is only about 1x the target’s revenue. blinkx says there are “targeted changes taken to focus Burst’s business”, but didn’t elaborate on these. Burst’s net losses swelled from $800,000 to $3.3 million in 2010.

blinkx has $52.8 million in the bank and will pay $4.5 million cash for Burst, the rest in new blinkx shares.