Video search engine Blinkx to go public

Blinkx, a privately held video search provider founded in 2004, will go public next month, in the latest sign that online video has taken off after years of unfulfilled promises.

The decision to take Blinkx public comes from Autonomy Corp., which will exercise an option over shares of the video search company. Blinkx uses Autonomy search technology to power its search engine.

The company will be renamed Blinkx PLC and its shares are expected to trade in the London Stock Exchange’s Alternative Investment Market, tailored for smaller growing companies, Autonomy said Wednesday.

Autonomy provides enterprise search software, a different market from the one Blinkx plays in: consumer video search. Consequently, Autonomy wants to separate its core business from the Blinkx business, Autonomy said. The spin-off will also allow Blinkx to focus on its market segment and clients, and to continue boosting its brand, Autonomy said.

Representatives from Blinkx and Autonomy declined to comment about the announcement.

But U.K. newspaper The Times reported Wednesday that by exercising its Blinkx option, Autonomy will end up with a 90 percent stake in the video search company. Autonomy was granted the option as part of a licensing agreement with Blinkx for the use of Autonomy’s technology, according to The Times.

After exercising the option, Autonomy will combine Blinkx with its internal consumer unit and then spin it off via an initial public offering (IPO) that could give the new Blinkx a market value of between $150 million and $500 million, The Times reported, quoting financial analysts.

After the IPO, Autonomy, based in Cambridge, U.K., will retain 10 percent of Blinkx’s ordinary shares, Autonomy said. The spin-off will be subject to tax clearances and other customary conditions, the company said.

Blinkx initially focused on the desktop search market, but as online video heated up in recent years, the startup switched its focus to video search. Blinkx now has indexed about 7 million hours of video. Unlike other video search engines, which index video files only according to their metadata, Blinkx also transcribes speech and indexes it, allowing for more granular searches.

Blinkx has struck deals with video content owners, as well as developed a variety of enhancements for viewing clips, while also licensing its services to other Internet companies. It competes with a wide variety of video search providers, including Google and Yahoo.