Video search engine firm Blinkx is acquiring online advertising network Burst Media for $30 million in cash and shares in a bid to provide customers with high margin targeted video adverts and personalised online TV channels.
Blinkx intends to supplement the display banner adverts that are currently sold to Burst’s customers with contextually-based video messages. It indicates that banner ads currently generate $1.49 per thousand page impressions, while blinkx’s untargeted video pre-rolls cost $20.
This means that the "combined group will be able to realise some of the differential between these two rates and share the resulting value with its publishers," the company said in a statement.
Suranga Chandratillake, Blinkx’s chief executive, added: "Up until now, the primary barrier to further television advertising budgets moving online has been online video’s inability to match the sheer scale of audience that television can deliver."
But the purchase would now enable it to overcome this challenge by combining blinkx’s technology and large video index with Burst’s "massive reach" in order to create "personalised, online television that is watched by hundreds of millions of users," he added.
Most of Burst’s senior management team will transfer to their new owner, although Jarvis Coffin, co-founder and chief executive, and David Stein co-founder and chief technology officer, will leave after a transition period.