Dear Mr. Mukherjee
As a long-term shareholder of Blinkx (I bought in about 6
months after the IPO) I am writing to congratulate you on your appointment as
CEO of the company, and to highlight what I and other shareholders regard as Chandratillake's
major failings and where, as shareholders, we would like to see the company
make major changes/improvements in the future. For me, these changes fall under
several headings:
1/ Comms/PR/IR/presentation. To date Blinkx's
corporate comms has been utterly appalling. RNSs are released for seemingly
trivial deals, and big news is released not at all or badly - why two days to
release an RNS about the AOL deal (and even then only because news of the deal
had leaked online)? I and other shareholder have actually had the phone put
down on us by Blinkx staff when we have called to ask questions and identified
ourselves as shareholders - such behaviour is completely unacceptable and would
not be necessary if the company released news in a consistent and competent
manner. In my opinion one of the worst aspects of Chandratillake's time as CEO was his
paranoid secrecy - often, I suspect, to cover up his failures. I very much hope
that this changes going forward.
2/ Advertising. I work in the IT industry Mr
Mukherjee - and yet nobody I talk to, either in work or outside it, has ever heard of Blinkx. Rather strange,
don't you think, for "the world's largest video search engine"? If
indeed that claim is true, how much truer would it be if word of Blinkx spread
virally among users? I've long thought that an occasional TV ad campaign in the
UK and US could pay massive dividends in driving traffic to the site, raising
the company's profile among the public and with potential partners, and
reassuring shareholders. Assuming of course that Blinkx's search technology is
really as good as shareholders have been told for the last 5 years.
3/ App strategy. Blinkx's app strategy to date -
if you can call it a strategy - has been at best disorganised and at worst
completely insane. Apps have been made for platforms whose users can be counted
in the tens of thousands, yet no apps have been made for popular platforms. Why no Blinkx iOS app? - if there is a reason, then the company should state what
that reason is, because otherwise it just looks like rank incompetence. And if
Blinkx is going to create apps, they should advertise (see my point 2 above) to
let people know they are there. The Blinkx app on Android OS has been
downloaded 5,000-10,000 times - and yet according to Wikipedia Android has an
installed base of c.331 million units! Why
so few downloads? Because nobody knows who Blinkx are or what they do!
4/ Product strategy. Throughout Blinkx's life
products have been developed which have been trumped as the Next Big Thing,
only to disappear without trace or explanation. Transaction Hijacking was
mentioned in the IPO prospectus as a source of future revenue - it never
appeared. Cheep was in beta for 2 years, before the beta ended and it too
vanished (so far as shareholders know), without a word of explanation. I'm sure
you're aware that 2 years is longer than Instagram took to be created, grow its
team to a dozen people, get 20 million users, and be bought by Facebook for
$1bn. Which brings me nicely onto:
5/ Lack of strategic, transformational deals; moving
too slowly. One simple question to ask about Blinkx is this: if the
technology is really so great, why does the company need to create apps at all,
why isn't its search technology being integrated into, for example, the Samsung
Smart TV OS? Or Facebook? Or Yahoo!? AOL was a good start (although
shareholders still don't know what it will mean to the bottom line), but the IT
sector - let alone the online video sector - is moving at hyperspeed, yet
Blinkx seems to be moving at a snail's pace (as I mentioned above - 2 years in
beta for Cheep before disappearing without trace? Really?). Why, for example,
isn't Blinkx doing something like Zeebox (social TV)? Why did Blinxk take so
long to bring an action that the passing off case against Blinkbox was thrown
out? The company needs to move much faster, be much more nimble and agile so it
can respond to a very rapidly-changing environment: and it needs landmark,
transformational deals or partnerships.
6/ Alignment of interests. Underpinning most of
the problems I outline above is one fundamental issue: Chandratillake never
bought any shares in Blinkx with his own money and held them for any length of time. He had share options, of course, which he exercised
whenever he thought the share price had got ahead of itself; but he never once,
so far as I am aware, bought any shares in the open market with his own money.
As a consequence there was always a suspicion that his interests were not
aligned with those of shareholders and it was that lack of focus which was
behind so many of the other issue. I would urge you and the rest of the senior
management team to purchase a significant stake in Blinkx with your own money
so that shareholders can be assured that the interests of management are
directly aligned with those of shareholders.
I'm sure I'm not the only shareholder who wants to see an
end to what I and many other shareholders regard as the cackhanded, incompetent
mismanagement of Blinkx that characterised Chandratillake's period as CEO. I
hope that you will rapidly move to stamp your own authority on the company and
usher in a new era of much more open communications with shareholders and the
City, faster product development and
better product delivery, more and better strategic deals in a very fast-moving
environment, and as a consequence of all that far better delivery of
shareholder value - a concept that seemed to be totally alien to Chandratillake
(but then as I mention above, he wasn't a shareholder).
I wish you the very best of luck with what will I'm sure
be a very difficult task.
Yours sincerely,
Simon Merlini
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