Internet video boom lifts revenues at blinkx
Video search company’s shares leap as it posts 36pc increase in profit due to proliferation of smartphones
The chief executive of blinkx, the British internet video company, has predicted that the boom in internet advertising has years to run after unveiling a 36pc rise in revenues.
Brian Mukherjee said that the popularity of smartphones and high-speed internet connections will continue to shift advertising spending away from television and towards online video, saying there are “massive opportunities for disruption [of the industry]”.
blinkx, whose database of thousands of videos powers searches on websites such as AOL and ask.com, saw shares rise 17pc on Tuesday after blowing away analyst expectations with six-month revenues of $111.6m (£69.6m), against $82m a year earlier.
This came despite the enormous boost the company received last year from the rise in video searches generated by the Olympics and the US presidential election. Profit before tax more than trebled in the period, reaching $10.8m.
“We find ourselves in the centre of the internet industry which is growing robustly and the video segment of that industry is growing faster than anything,” Mr Mukherjee said.
“Content consumption patterns are changing rapidly and we think they are irreversible and accelerating.” He predicted that the sector would enjoy several years of double digit revenue growth, with television advertisers increasingly moving to focus on internet video.
“Even today 94pc of video advertising dollars are still spent on TV, and with any new media there’s a lag between advertising and consumption. We are still in the first innings and we’d expect the advertisers to follow.”
blinkx was founded as a side-project at Autonomy, the former FTSE 100 software company that was bought by Hewlett-Packard last year. It was spun off from Autonomy and listed in 2007.
Investors lost confidence in 2011 after a profits fall but blinkx has been one of the success stories of the British technology industry since. Shares have trebled in value this year and have recently surpassed the levels of two years ago. On Tuesday afternoon they rose 28 to 196p.
Mike Lynch, the founder of Autonomy, retains a 4.9pc stake now valued at more than £35m.
Mr Mukherjee, who joined blinkx in 2011 when it bought his Prime Visibility Media Group, said there is continued scope for acquisitions, with a cash pile of almost $70m.