Blinkx heats up online video battle with Google

Blinkx, an Internet video search company based in London, will start
letting consumers make money from the videos they show on their own
blogs, social network sites or home pages if they agree to include
advertising in the videos.

By combining two hot Internet trends - social networking and online
video - with a money-making opportunity, Blinkx hopes to better
compete with YouTube, the market-leading service for video-sharing
owned by Google, said the founder and chief executive of Blinkx,
Suranga Chandratillake.

Blinkx's move heats up the competition in online video, which has
sparked multibillion-dollar acquisitions, attracted countless amateur
and professional video makers, and roused the interest of marketing
executives worldwide who see a new audience for their advertisements.

The growing reach of broadband Internet access has in the past two
years made video appealing to large numbers of Web surfers.

Google on Tuesday said it would allow Web sites in its advertising
network to use some YouTube content. Two other companies, Babelgum and
Joost, hope to use the Internet to become alternative television
providers.

Blinkx, however, has until now concentrated on its role as a video
search engine. The company, which was spun off from the British
software firm Autonomy in May, uses speech-to-text transcription and
visual recognition technology to sift through Internet videos.

On Monday, Blinkx started offering search capabilities in French,
German and Spanish. It is indexing content from 200 European sources
and sites with more than one million hours of foreign language video
content, including Eurosport, Euronews, TF1, El Mundo, Le Monde and
Spiegel TV.

Under Blinkx's new program, to be formally introduced in London on
Wednesday, Internet video fans can take a film clip, post it to their
site and submit it to Blinkx to be indexed and categorized.

Each time the video gets watched, the Blinkx system will choose a
relevant ad from its inventory and place it in one of two places -
either in a small transparent window in the bottom of the video
screen, or in a box outside the top of the frame.

Every time an ad is clicked, the Web site on which the video is hosted
will receive a portion of the payment for the ad placement. The rate
varies based on the ad, but it is generally a few pennies per click.

"This way, the people who are powering the video revolution are the
ones who get the rewards," Chandratillake said.

Chandratillake said the choice of ad display was up to the host of the
Web site, adding that they were no more distracting than the banner
ads now common on Internet pages.

Many Web sites - especially social networks like MySpace and Facebook
- allow users to borrow and "embed" video on their personalized pages.
Others, usually professional media companies like the BBC, do not.

Chandratillake cautioned that any income derived by bloggers and
others agreeing to take the ads would not be much, "maybe enough to
pay your Internet bill at best."

Under the new YouTube program, the videos would be provided by about
100 content partners, including TV Guide Broadband, Expert Village,
Mondo Media, Extreme Elements and Ford Models. The ads would come from
Google's vast inventory, which dwarfs the amount that Blinkx has to
offer.

Last week, Blinkx, which trades on the London alternative market, said
first-half results would be at the top end of analysts' expectations.
Piper Jaffray had forecast interim revenue of $2.4 million.

The British company created its own video-ad network, called AdHoc,
earlier this year.