There hasn't been a blockbuster internet IPO in the U.S. -- or even a halfway decent web IPO in the U.S. -- since Google went public in 2004.
Still, Suranga Chandratillake, CEO of blinkx, is one of the lucky few who took an internet company public last year. No, he didn't ring the bell on the New York Stock Exchange -- instead he took his act overseas. He raised roughly $50 million through a public offering on the London Stock Exchange AIM.
We chatted with Chandratillake yesterday, the one-year anniversary of blinkx's IPO, about the pesky acquisition rumors, the advantages of going public, and his take on the economy and the online ad market.
Wired.com: How did you end up going public in London and not the U.S.?
Suranga Chandratillake: [Our banking advisors) recommended how they thought we should
raise funding, and the options were to take on venture capital, raise private equity, or a debt-based investment, or to float the company. They said there were a few markets in the world that still support small [public] companies really well. We always assumed an IPO was too expensive and too complex for a company of our size -- it wasn't something we'd seriously considered, but as they described it, it began to sound attractive.
Wired.com: So if you had to do it over again, would you go through with an IPO?
SC: Yeah, I think we would, on reflection. The obvious cons are that it's a lot of work -- not just going through the process but the ongoing responsibility to shareholders, which is more complex than with VCs or private investors. [Through the IPO] we raised the funds we needed and it meant we could share the value of the company with our employees. And I also think it has raised our profile to some extent -- we're based in San Francisco and have less of a presence in the U.K. Now people are more aware of us because we're out there. While [the IPO] was a lot of work, the pros definitely outweigh the cons.
Wired.com: Has it been challenging to recruit people since you're already public or has it been a distraction for existing employees?
SC: I don't think anyone attaches that much meaning to it. There are definitely some people who would rather join a private company with only 10 employees, but we're not that company.
Wired.com: We keep hearing that every startup is for sale right now, and there have been rumors that blinkx is an acquisition target. Is there anything you can comment on?
SC: We're moving along as normal . . . From the point of view of all the speculation, we put out a press release to say we hadn't had any formal bids that we were aware of . . . We inhabit a pretty desirable space, and we offer a very fast growing portion of the search business which is of strategic importance to all the media companies. For that reason, it's not surprising that we see that speculation.
Wired.com: And what do you see coming in the economic pipeline? Marc Andreessen recently predicted a 'nuclear winter' is coming . . .
SC: There are lots of reasons why you can logically argue that [there's going to be a plunge in the U.S. ad market] -- the U.S. economy doesn't look fantastic, and based on that, you can say advertising is probably going to shrink. But we haven't seen any of that. Every single month that we've been in business has been a bigger month than the one before. We haven't seen any of the slowdown that's supposedly happening, and I think one of the reasons is that online advertising is such a fast-growing market, and within that space, video advertising is growing fast.