Online video search and ads company Blinkx announced Friday that it has acquired ad network Burst Media in a deal worth $30 million in cash and stock. The acquisition will help nearly double Blinkx’s revenues in the fiscal year, by driving higher-CPM video advertising through Burst Media’s network of publisher sites.
Blinkx hopes to create more value for both companies by embedding video and accompanying higher-CPM video ads through Burst Media’s roster of publisher sites. Burst reaches approximately 61 percent of the U.S. online population and is ranked as the 36th largest media property here. But it only gets an average CPM of around $1.49, compared to the $20 CPMs that Blinkx gets for non-targeted video ads its serves. Because of that, Blinkx sees an opportunity to not only expand the reach of its videos, but to drive higher CPMs through Burst Media’s publishers.
And that’s without any targeting technology. Last year, Blinkx added behavioral targeting to its video ad network, which could create even more opportunity to drive higher CPMs through publisher sites.
Blinkx will pay $4.5 million in cash as part of the deal, with the remainder being paid through the issuance of new shares of stock. After the deal closes, Blinkx will have approximately $52.8 million in cash on hand. In exchange, Blinkx expects Burst Media revenues of around $33-$34 million. That will drive full year revenues at Blinkx up nearly 90 percent year-over-year, to approximately $65 million. Blinkx says that it will retain the majority of Burst Media senior management, with Co-Founders Jarvis Coffin and David Stein staying on to aid in the management transition.