Megabuyte

Blinkx issues maiden interims

Autonomy spin-out Blinkx has issued its maiden interim results to September showing revenues of $3.0m and an operating loss before $11.5m IPO and demerger costs of $2.3m. There are no comparative numbers for H1 fiscal 2007, although the prospectus showed revenues for the whole of calendar 2006 of $3.8m. The company has now indexed of 18.5m hours of video and has attracted new parters in the period including Ask.com, RealNetworks and InfoSpace. Daily searches on the Blinkx platform were 4.2m in September up 280% on the year.

Our view

In our view, the financial results are not the driving factor behind Blinkx's £100m valuation - it is all about mind share for its search technology. In this regard the company has made progress in H1 with an impressive increase in usage. However, we have two significant worries. First we do not see Blinkx as a leading brand in web 2.0. Whilst this may seem like a relatively trivial point, we see a strong brand in the web 2.0 community as a central requirement for Blinkx to be successful. We closely monitor the output from key publishers such as TechCrunch and we just don't get the feeling that Blinkx is a 'hot' company in the West Coast. Perhaps a bigger worry is Google's increasing integration of video into its the mainstream of its strategy as typified by the recent launch of Adsense for video on YouTube (which was acquired by Google earlier this year). Blinkx's Adhoc platform seems to us to go head to head with Adsense on YouTube and, whilst Blinkx would claim that Adhoc is targeted at a different segment of the market, even the perception that Blinkx is standing in front of the Google juggernaut is a worry for us. Readers may be interested to read TechCrunch's view of Adhoc here. Whilst we are not disputing that Blinkx has strong technology, in a brand contest between Blinkx and Google, there can be only one winner.

UK Technews 10.10.07

We were quite surprised to see the Logica price react so strongly to the news of Andy Green's appointment as CEO - the shares ended the day up over 10% to 167p. Opinion seems to be divided on Mr Green with some saying that he it just the kind of detail man that the company needs whilst others say that he lacks the charisma to drive the company forward. Alphameric continued its recovery yesterday adding another 2p to end at 16p and has opened up again this morning. Not so lucky was Coda which dropped over 6% on the day to close at 174p. We managed to get underneath the story on Emblaze where president Eli Reifman bought shares at more than double the market price. The FT reported yesterday that the company had bought shares from Mr Reifman at 149p a year or so ago to help him pay off personal debt and he is now buying the shares back at a token 1p premium. Quite why the company did not mention this in the statement, we don't know. Still, a 25% share price increase is a useful fringe benefit although, unsurprisingly, the shares have started to drift this morning.

This morning, Blinkx has launched the AdHoc widget which sits on top of its AdHoc advertising platform (which Blinkx launched in June) which enables contextual adverts on videos embedded in blogs and other websites. The release this morning looks to be in direct response to the announcement from Google yesterday that it plans to make the Adsense advertising platform available on video clips posted on YouTube (which Google acquired last year for $1.6bn). These developments would seem to put Blinkx in direct competition with Google. Readers interested in this topic may want to look at articles in The Times, internetnews.com and Forbes. Blinks shares are unchanged this morning at 32p.

Network optimisation solutions vendor Endace has issued a positive trading update this morning confirming that trading is in line with expectations. Revenues in the first five months of the year are 34% up to $8.3m although profits are only up slightly to $1.0m due to planned investments in overheads to drive growth. Endace shares have opened up 2% to 475p.

UK Technews 2.10.07

Better late than never, a quick round up of the day's news. First, Mediasurface shares are deep in the red after a bad profit warning - the shares are down over 50% (see separate post). Phoenix IT is also under pressure today following its trading update yesterday - the shares are down 6.5% to 350p. On a more positive note, Blinkx has said that current trading is ahead of expectations and that results for the first half to September will beat the top end of expectations. The shares are up 16% to 34p.

The SmartStream IPO bandwagon came to a sad end yesterday as the company announced that it had delayed its IPO indefinitely. This follows news on Friday that the company was going to give it a couple more days to see if they could fill the book. However, according to the FT, the company's hand was forced by the SEC which was unhappy about the IPO being finalised so close to the SIBOS trade show where SmartStream management would be making presentations. Even without that though, news of massive losses at Citigroup and UBS resulting from sub prime mortgages may well have been the last straw anyway. It's always a shame when IPOs don't get away but it will be interesting to see whether TA Associates, who have only owned SmartStream for a year or so, stick with it or look for a trade exit. We watch with interest to see whether Telecity gets a warmer reception and whether others that are rumoured to be trying for an IPO, such as Sophos, carry on with their plans.

We've just spotted that Anite has replaced UBS as its broker with JPMorgan Cazenove and Landsbanki as joint brokers.

We're at the Future of Web Apps (FOWA) conference tomorrow which should be really interesting. At a time when Web 2.0 is attracting so much attention, this event brings together many of the top people making it happen as well as some very funky start ups.

UK Technews 14.9.07

There was plenty of interesting moves yesterday. SQS ended up 3% to 295p as the company announced its largest ever contract win and placed just under £2m of stock for employees. K3 Business Technology continued to its strong run following results last week - the shares added another 15p yesterday to close at 194p taking the gain to 15% since results and well above the previous high of 165p achieved earlier this year. Axon was also strong (up 2.7% to 847p) continuing its run following excellent results last week. After a dip below 650p over the summer, Axon shares are also now above their 12 month high - in fact they are above their 5-year high. Video search technology company Blinkx was also perky yesterday on the back of a partnership with Utarget ending up 3.8% to 41.5p.

Less fortunate yesterday were Datatec - down 6.5% to 259p - following a trading update revealing issues it its US business and Bond International, which close down 5% to 200p.

Turning to this morning, results from Netstore reflect the recent profit warning but new CEO Graham Kingsmill gave an upbeat assessment of the company's ability to get back on track. Netstore shares are unchanged this morning at 25.5p. On the M&A front, Sanderson has announced the acquisition of Retail Business Solutions for a maximum of £14.0m in cash and shares. Sanderson shares have opened up 5% to 50.5p.