Rolling up video advertising is the order of the day its seems. UK advertising tech company and network Burst Media has been acquired for £18.5 million ($30 million) in cash and shares by video indexing and advertising company Blinkx.
Burst was the 16th largest ad network in the U.K. in February 2010, reaching nearly 12.3 million unique viewers, and itself acquired ad network OTP Media, as well as entertainment ad network Giant Realm for $2.1 million, both last year.
Burst claims to reach 130 million unique users, over 61% of the US Internet audience – numbers which would make it the 36th biggest US internet property. Burst has revenues of $33 to $34 million but net losses went from $800,000 to $3.3 million in 2010. Blinkx has $52.8 million in liquid assets and pays $4.5 million cash for Burst, the rest in new Blinkx shares.
The goal, says Blinkx, is to extend audience reach by delivering relevant, complementary video from its index into Burst’s network of publishers. The publishers are then supposed to be able to tap into the video ad market, where video ads are can be $12 to $30, while banner ads are $1-3.
The cash consideration is understood to be not larger than $4.5m, and blinkx’s cash balance immediately post-completion is expected to be greater than US$47.0 million.
Blinkx will have larger scale now, and can potentially get higher CPMs for its ad sales. Connected TV, also known as OTTTV (Over The Top TV) will also be a big factor going forward.