Business Weekly - Cambridge, UK

 The company, which uses the first commercial application of Autonomy's powerful IDOL software to organise the millions of hours of video available on the web, has seen its share price slide since it floated on AIM in May last year.

Blinkx has lost 59 per cent of its value since its IPO, which the analyst said rates it at a discount to video competitors, Yahoo! and Google, which incidentally the company outstripped in the UK last year.

The new note, issued by Piper Jaffray refers to Blinkx as a loss-making company facing well-resourced search competition, but with a powerful differentiator in the form of the Autonomy licence, which it has exclusively for the next four years.

The note upgrades the stock to a buy, calling it "an attractive play on the 'next wave' of the search market as users increasingly transition to consuming, and searching for, video content online."

Piper states that recent work by its US arm has shown that the continued shift of advertising spending from traditional media into the online environment is not slowing down, and it expects Blinkx to benefit as the rising consumption of video content increasingly drives advertising revenue into this format.

Blinkx's partners continue to grow in number, with the firm adding ITN Source and France 24 news feeds already this year, and Raindance, founder of the Raindance Film Festival and the British Independent Film Awards agreeing to host, transcribe and index top independent shorts, features and documentaries on its website before Christmas.

It has signed partnership deals with more than 220 companies and hosts 18 million hours of indexed video and audio content, serving more than 50,000,000 visitors every month.

Blinkx's share price has grown 1.25p to 20p, well shy of the 32p target given it by the Piper note.

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