A good overview...

Private Punter - July 14


A NUMBER of canny investors who jumped on board local company Autonomy could be forgiven for feeling a little smug today (Monday, 13 July).

This is one mouth-watering success story, where the shares have, in the last three years alone, risen from £2.40 to a current £13.20.

At a time when others have seen their market value decrease substantially, Autonomy by contrast now boasts a valuation of more than £3bn. Of course, this is a remarkable success story and long may it continue, however it is to other pastures that I turn this week, where Autonomy holds a 10%.

The name Blinkx - shares currently 14.5p - will no doubt fail to register for many reading this article, or even give rise to an understandable frown or sceptical shake of the head.

OK, so this may well be another (currently) loss making AIM listed stock, but as a speculative punt, it could pay off handsomely. A spin-out from Autonomy House on Cambridge Business Park, Blinkx has no doubt already made a number of Autonomy employees significantly richer.

But as far as its business goes, Blinkx has positioned itself as the world's most advanced video search engine via the internet, a market that is still evolving and should continue to grow substantially in the coming years.

Having originally been born out of a concept developed from within Cambridge University, Blinkx has subsequently seen $150m ploughed into research and development over a 12-year period prior to flotation and holds more than 100 patents on its technology.

After demerging from Autonomy and floating just two years back, the company is already making its mark, with sales for last year jumping significantly from a previous $6.5m to $13.9m and that figure should increase again this year.

Importantly, Blinkx now holds some 35m hours of searchable video content along with more than 500 media partnerships which see it cementing its position in the market and taking on the business giants. Since the beginning of this year video views per day have doubled each week and currently stand in excess of 2m.

While the concept was designed and aimed initially for computer use, Blinkx has been quick to exploit opportunities in what is a fast-moving market and has already made the important transition into the living room. As recently as May this year, the company revealed it had signed a deal which will enable its video search and interactive services to be viewed on TV across the UK - a big step forward which could not only substantially boost revenues but may also ignite the share price.

TV search is achieved via set top boxes and will be available, initially, for Sky and Virgin Media customers.

The company has also recently revealed a deal with Fox Sports that will deliver easy access to sports and various video clips using Blinkx's unique search engine.

With a current AIM market cap of £40m, Blinkx has around $20m in the bank and at the current price of 14.5p, looks worth a punt to me.

Although it may need to raise further funds, it should be in a much stronger position as it moves closer to profitability. Losses have been reduced and progress should continue as revenues build and gather pace.

It is also conceivable that a larger market player may move to snap up Blinkx, which is already ruffling feathers and attracting attention.

A number of large institutions hold the shares, including Lloyds, Fidelity and JP Morgan, along with Autonomy founder and chief executive Dr Mike Lynch who, as a non-exec director, sits on 8% of the company.