Sunday, 10 August 2008

Miva rejects Blinkx bid

On Friday, Blinkx made a bid of $1.20 per share for US NASDAQ-quoted On Friday, Blinkx made a bid of $1.20 per share for US NASDAQ-quoted Miva – valuing them at $39m. Miva is an online advertising group which earns its money from pay-per-click advertising based around its specialist toolbars. Miva immediately rejected the offer saying that the offer undervalued the company. That was a bit rich as Miva was trading at $0.79 before the bid. Although Miva has $20m in cash on its balance sheet and revenues of $153m in year to 31st Dec 07, it really has been struggling. revenues seem to be on a long downward decline. Just $33m revenues were vrecorded in Q1 2008. Miva shares have crashed from $7.50 just a year back in Aug 07 to 79c before the bid.

This all boosted Blinkx shares which rose another 10%/3p to 32p on Friday. As I have disclosed before, I became a Blinkx shareholder at their IPO last year at 45p and have seen my investment dive rather sharply since. They reached a low of 15p in early July. I’m never quite sure how to feel in such circumstances – glee at them doubling in the last month or dismay at the 30% loss I am still carrying.

But I actually still rather like Blinkx. Last month, in the UK, they had more visitors than Google Video; attracting 5m visitors a day. They have 26m hours of video indexed and loads of partners, like the BBC, as partners. Video forms a key element of our integrated use of the internet but many people think video on the internet is ‘just’ Youtube. Blinkx gives you access to everything on Youtube - and so much more. Try searching for the Rolling Stones Brown Sugar on Blinkx and you get a massive choice (85,000 videos of them performing just that one song!) from a range of sources. (One of my favourites is the BBC’s Top of the Pops 1971 appearance with Mick in his pink satin suit.)

Miva would be a huge step, in revenue terms, as it’s 8x bigger than Blinkx. Blinkx CEO Suranga Chandratillake wants Miva for its distribution network. I’d just caution him that it breaks (in spades) Holway’s golden rule for avoiding Acquisition Indigestion.

No comments: