Should Google Buy Blinkx?

By Aaron Goldman, VP Marketing & Strategic Partnerships
Appeared in MediaPost’s Search Insider

It's clear that online video is a huge growth category for Web publishers and advertisers. As such, it's also a tremendous growth area for search engines and search marketers.

With U.S. broadband penetration set to surpass 50% in 2007 according to eMarketer, more and more video content is being posted and viewed on the Web each day. And with new technologies like Apple TV creating quick and easy connections between the computer and the TV, the demand for topnotch video search solutions will only intensify.

Currently, none of the Big 3 search engines stand out when it comes to video search. Of all the major players, AOL seems to have taken a leadership position with its integration of Truveo and Singingfish into AOL Video. The time is ripe for Google to make a serious play in the video search space.

As it stands, the consumer online video experience suffers from lack of quality and accessibility. Since Google is not a media company, it has to rely on others to improve the quality of content, whether it be the networks and studios or everyday Joe's (or Jessica's). Progress is already being made by the former, as evidenced by Viacom's recent deal with Joost and platforms like NBC rewind and CBS Innertube. The latter is still debatable, as evidenced by the fact that the most popular video of all time on YouTube is some dude dancing.

Accessibility is a much less amorphous topic. It all comes down to searchability. EMarketer recently highlighted research showing that only 37% of online video viewers use a search engine to find online video. The survey notes that most video views resulted from people simply coming across the content while browsing the Web or hearing about the video from friends.

This is not unlike the way people found various Web sites in the early days of the Internet. Before Yahoo and Google came along, you found a Web site by navigating linearly from link to link or by typing in a URL after being tipped off to it by a friend or directory (like Jerry and David's Guide to the World Wide Web.) Of course, search engines came along and changed the way online content was consumed -- and it's only a matter of time before video search becomes the No. 1 way people find video on the Web.

The eMarketer article also points to research that shows what consumers like the least about online video today. Not surprisingly, the top 5 responses were:

1. Too many video ads

2. Too tough to find quality video productions

3. Too difficult to find exactly what I'm looking for

4. Too many videos to wade though

5. Too much user-generated content to wade though

If this isn't a cry for search solutions, I don't know what is. As we all know, on-demand content and targeted advertising collide at the intersection of query marketing. I'm sure people wouldn't be complaining about there being too many ads if the messages were relevant and non-interruptive. When it comes to online video, better search functionality and search advertising is a win-win for consumers and advertisers alike.

This is where Google buying blinkx comes in. Blinkx has a top-notch video search technology, and Google has the resources to improve and scale it. Google also has the platform and advertiser base to monetize online video better than the pre-rolls that are frustrating today's online video consumer. And Google also has a little property called YouTube that would serve as a great testing ground -- and is still searching for the best way to incorporate advertising.

Unlike many other video search engines that rely on user submissions and/or tagging to deliver results, blinkx crawls the Web for video content and uses visual analysis and speech recognition to better understand rich media content. I've used blinkx for some time. It's by no means perfect, but it's good -- and I'm sure there are some Google engineers salivating at the chance to get their hands dirty with its algorithm.

Additionally, the blinkx technology is scalable to terrestrial and satellite radio, providing potential applications to Google's floundering dMarc division. And if the long-rumored Google acquisition of TiVo ever happens, blinkx would fit in nicely --- its technology not only provides a better way to index video content, but has an application called "Video Smart Folders" that allows users to create "intelligent multimedia folders that automatically update their content as new footage becomes available." Sounds like a nice add-on to TiVo suggestions.

The numbers don't lie -- online video is one of the Web's fastest-growing categories. For that growth to be sustainable and meaningful to marketers, the quality and accessibility of online video needs to scale proportionately to the volume of video posted and viewed across the Web.

As Google CEO Eric Schmidt said in the wake of the YouTube acquisition, video is "the next step in the evolution of the Internet." It's time for Google to put its money where its mouth is. Shelling out $1.6 billion for YouTube is not enough (yes, I said it). Google needs to take the next step and create a better video search technology. If it doesn't, it risks losing its 47.5% share as more and more queries are conducted for video content.

Acquiring blinkx might just be the answer. With a nine figure valuation despite having only 27 employees, and a revenue model based solely on licensing (certainly not Google's sweet spot), blinkx is definitely not a no-brainer. But if Google can use its technology to improve the video search experience and better monetize YouTube, the investment will surely pay off in the long run.

There’s no question innovation in the online video space is moving at breakneck speed. Google needs to solidify its leadership position in video search before it blinks and someone else pulls ahead.


Copyright © 2008 Resolution Media, Inc. All rights reserved.