Blinkx (BLNX)
Blinkx is the world's largest online video search engine, with 35 million hours of video (almost 4,000 years' worth) indexed. The firm's proprietary technology uses speech recognition to listen to the audio component of the video content, and then uses both the phonetic and text transcripts to match content with search queries. This is far superior to conventional searches which usually just search through the text of video taglines - a method which can often have poor results. Indeed, Blinkx's is the most advanced video search offering in the market, surpassing even the abilities of search engine behemoth Google.
Blinkx monetises its offering by attracting advertisers to the material made available through its content partners. Its sophisticated technology enables advertisements to be coupled with the most appropriate content and to be matched to real-time viewing (i.e. placed at the most opportune moment). Blinkx's advertising partners, which include household names like Unilever, McDonald's and Vodafone, pay at an agreed cost per view rate. The company's revenues are therefore dependent upon the amount of volume it attracts, both directly and through its syndication partners. The average daily search run rate during the six months to end March 2011 was 44.5 million, up from 31.6 million searches per day during the first half.
The opportunities on offer for a company like Blinkx, which has established a dominant role in a major growth market, are myriad. Its development is underpinned by a number of key trends, such as the growth in internet exposure and usage, and the relative decline in traditional media. Advertisers are increasingly looking for ways to focus their campaigns to achieve better results for less cost, and the internet - and specifically Blinkx's technology - can help them do that. Moreover, Cisco projects that by 2014 mobile data traffic will have grown 39-fold, with some 72% being video-based. This represents a huge opportunity for Blinkx, which seems to be on the cusp of greatness.
Investors should use the current market sell-off as an opportunity to re-assess growth stocks like Blinkx, where they may have 'missed the boat' on the initial upswing. Blinkx has traded on some pretty lofty earnings multiples of late, but it has also been churning out some phenomenal numbers and brokers anticipate earnings growth of 136% in the current year (to March 2012) followed by 62% in 2013. The PEG rating is a mere 0.2. Even if the economy does take a turn for the worse, Blinkx should remain pretty insulated from the worst of the downturn as advertisers will concentrate their efforts on thos
