Signaling market consolidation, video indexing and ad company Blinkx has agreed to buy Burst Media for $30 million. In a word, blinkx CEO Suranga Chandratillake said the deal is all about scale.
"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," said Chandratillake. He said the deal will help advertisers better segment and target these larger audiences.
Per the deal, blinkx plans to embed relevant videos and video channels into Burst's thousands of publisher sites. UK-based Burst presently claims to reach 130 million unique users, including more than 61% of U.S. consumers.
"By fusing blinkx's unique patented technology and large video index with Burst's massive reach, we will have the potential to create personalized, online television that is watched by hundreds of millions of users."
blinkx will also create contextually relevant video channels for Burst's network of publishers, thereby aggregating an online video audience for advertisers across these special interest sites.
The majority of Burst's senior management team is expected to continue with the combined group, with Jarvis Coffin, co-founder and CEO of Burst and David Stein, co-founder and CTO of Burst, remaining in temporary roles to assist the transition.
Burst bills itself as a specialist "long-tail" ad network; it boasts exclusive relationships with independently owned Web properties that target specific niche audiences.
In 2010, the ad network and tech company reported revenues of $33 to $34 million, but net losses of $3.3 million. Shares in blinkx rose 10% on the news.