Eric Schmidt, Chairman and CEO,
Google Inc. ,
1600 Amphitheatre Parkway,
Mountain View, CA 94043
5th November 2009
Dear Mr Schmidt
I read with great interest recent press coverage about Google’s plans to resume the buying of small tech companies now that we are nearing the end of the recent terrible recession.
Could I suggest you take a long hard look at Blinkx?
It has just released interim figures showing that revenues have doubled again, and that although costs have also gone up we are assured by management that costs have now levelled off. The company claims still to be on target for profitability in full-year 2010.
Unfortunately, due to the fact that management doesn’t seem to think that the markets or shareholders have a right to know anything about anything – and in particular has refused to release any details about the recent takeover of Zango – the share price is still languishing and many shareholders are very angry indeed about being kept in the dark.
Which is of course why I’m writing to you today – I am one of those very disgruntled shareholders. I have held shares in Blinkx for more than 2 years, but frankly have given up hope of ever seeing the return on my investment which I hoped for when I invested. My own view of the company is that while they have fantastic technology – and technologists – the management team are too concerned with technology for its own sake and completely ignore their responsibilities to shareholders.
However, Blinkx’s technology would make a fantastic fit with Google: monetising search on YouTube, and with other technologies like SmartShopper and AdHoc which could be leveraged either through the Chrome browser or – even better – the Chrome OS when you release it (quite apart from opportunities with third parties).
And while Blinkx’s management team seems to lack the experience and gravitas to cut deals like the obvious one to get their index of 35m+ hours of professional long-form video in front of the hundreds of millions of eyeballs which, say, a Yahoo possesses – you could cut that deal, couldn’t you Mr Schmidt?
It also seems obvious to me that Blinkx should release a branded iPhone app to let iPhone users easily search for and watch video on their handsets, making full use of their unlimited (fair use) data allowance. Sadly this penny doesn’t seem to have dropped yet with Mr Chandratillake and the rest of his team. They have great tech, but they seem to think they’re running an Autonomy R&D department rather than a company with shareholders to whom they have an obligation and a duty to deliver growing value. Perhaps if Mr Chandratillake, as CEO, put his money where his mouth is and bought some shares in his own company then investors and the markets might feel differently, but regrettably to date that has not happened.
So in conclusion I would recommend Blinkx to you, Mr Schmidt. It is true that you might also need to take over Autonomy to get it (AU has just increased its holding in Blinkx to the low-mid 20s %) – but given that it is Google’s stated mission to organise the world’s data, what could be better than to get hold of corporate search and leading video search technology? And if, having ringfenced all the patents and IP relating to video search, you decide you don’t want the rump Autonomy business, I’m sure SAP or Oracle would be interested in taking it off your hands.
Such a deal makes perfect sense – and with a market cap of only £55m, Blinkx could be bought at a very reasonable price! (Autonomy wouldn’t be so cheap, but still relatively small beer by Google/MS standards).
Something to think on, Mr Schmidt…
Yours sincerely,
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