Blinkx spent $30 million for the online advertising network Burst Media. Burst sells ad space packages across hundreds of websites. Unique audience numbers of Burst sites now add up to 130 million. Blinkx hopes the deal will prompt its publisher clients to run broadcast ads through its own video player.
Blinkx will issue 15M new shares to provide cash for the deal and will give Burst shareholders the option to take cash or a holding in the new combined group. Although Burst, which is listed on the London stock exchange operates in the UK, its main operations are in the US.
Following the buy, blinkx intends to drive expansion of its audience through embedding relevant videos and video channels into Burst’s network of publisher sites. The combination of the two companies will bring blinkx’s 35 million hours of online video and TV to Burst’s audience.
Burst’s network of publishing partners reaches over 61% of the US online population. It ranks as the 36th largest US media property and the 30th largest UK media property on the internet (source: comScore Media Metrix December 2010).
blinkx expects the acquisition to be earnings accretive for the year ending 3/31/12. The majority of Burst’s senior management team will continue with the combined group, with Jarvis Coffin, Co-Founder and CEO of Burst and David Stein, Co-Founder and CTO of Burst remaining in temporary roles to assist the transition.
Said Suranga Chandratillake, blinkx CEO: “In just a few years, we have seen online video advertising become the fastest growing segment of online advertising. Up until now, the primary barrier to further television advertising budgets moving online has been online video’s inability to match the sheer scale of audience that television can deliver. We are extremely excited about the acquisition as it will allow us to overcome that challenge: 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.”