Blinkx to acquire Burst Media for $30 million
Video search engine Blinkx plans to buy online ad company Burst Media, with the deal expected to close next month.
Video search engine Blinkx has agreed to acquire online advertising company Burst Media, the firms announced today.
Under the terms of the deal, Blinkx will pay Burst $30 million in stock and cash, the company said. In addition, Burst's senior management, including its co-founder and CEO Jarvis Coffin and co-founder David Stein, will stay on in a temporary role to aid in the transition.
Over the last several years, Burst, which provides online video advertising solutions to Web publishers, has been generating sizable revenue. According to Blinkx, Burst generated $37.7 million in revenue last year, up from the $31.4 million it captured in 2009. However, the company posted an earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $1.4 million in 2010. Its 2009 loss was $600,000.
For its part, Blinkx, which calls itself "the world's largest and most advanced video search engine," has been able to generate a slight profit as of late. According to the company, its revenue was up 109 percent during the six-month period ended September 30, 2010, to $27.4 million. During that time, it was able to post a profit of $2 million.
Blinkx said that it plans to integrate "relevant video and video channels" into Burst's network of "thousands" of publisher sites. For example, the company said, it will supply publisher sites focused on food with "video content on cooking demonstrations, advice on choosing fresh ingredients, and utensil testing."
"By fusing Blinkx's unique patented technology and large video index with Burst's massive reach, we will have the potential to create personalized, online television that is watched by hundreds of millions of users," Blinkx CEO Suranga Chandratillake said in a statement.
Blinkx expects to close the acquisition on May 9.