When you look at Blinkx’s underlying product metrics, you see a bellwether for the growth of the online video sector.
But, when you check its share price, you see that growth in reverse…
The firm, which indexes video from over 720 partners and serves ads against them, passed 100 million monthly unique users in January. Half-year revenue almost doubled last year, new partner announcements come thick and fast from Blinkx’s typical press release factory, the firm has been integrating its acquisitions of ad net PVMG and ad tech outfit Burst Media.
The coming move of online video from desktop to living room would seem to offer considerable growth potential.
But Blinkx shares on London’s AIM market are down 72 percent from their November high.
What’s going on? Many investors piled out of Blinkx when it unveiled half-year pre-tax profits down 26 percent in November.
That appeared to be punishment for Blinkx’s acquisitions. Had it not spent $3.5 million acquiring and amortising those companies to boost its advertising offering, Blinkx pre-tax profit would have doubled to almost $5 million.
But others maintained confidence in the wider opportunity.
Some believed Blinkx to have hit a low that made it a strong stock buy for future growth. But its shares have gone on falling – exacerbated by its warning this April that, despite growing 72 percent, its annual revenue would nevertheless miss analysts’ expectations.
What does Blinkx’s share performance say about the state of online video? Not much – again, the two are out of sync. eMarketer expects U.S. online video advertising spend to grow 54 percent through 2012 as the internet’s fastest-growing format – Blinkx revenue already outstripped that growth in 2011. Suddenly, those missed expectations can be put in context.
But now Motley Fool reckons: “Blinkx could be a prime takeover target for one of the cash-rich tech giants looking to grow through acquisitions.”