11th Nov 2014 10:25
LONDON (Alliance News) - Blinkx PLC Tuesday said it swung to a pretax loss in the first half of its financial year, and forecast a "broadly similar" result in its second half as it continues to invest in its mobile offering to meet a swing in demand to mobile advertising.
The company posted a pretax loss of USD9.7 million for the half year to end-September, compared with a profit of USD10.8 million a year before, as revenue fell to USD106.0 million from USD111.6 million, and administrative expenses rose.
Whilst the company saw strong revenue growth from its mobile advertising formats, desktop advertising formats continued to decline as the industry continues its shift towards mobile.
Blinkx said that it was continuing to take steps to reallocate its resources to emerging channels, specifically around mobile video and automated trading.
"As the industry continues to change and advertisers grow more comfortable with high-growth ad formats and emerging standards, we remain confident and optimistic in our prospects and the industry," the company said in a statement.
Blinkx said that the costs of traffic acquisition has risen due a shift in the competitive environment and the growth of mobile.
Blinkx also said it was experiencing "lingering commercial and reputational effects of the attack on the Company's stock earlier in the calendar year".
Its shares fell heavily in January after a disparaging bog made allegations about its revenue sources.
The blog, written by an associate professor at Harvard Business School, Benjamin Edelman, made allegations about the company's business model. Blinkx refuted the claims, and at that time noted that Edelman had "prepared a portion of this article at the request of a client that prefers not to be listed by name".
In February the article was amended to take out a key assertion. The professor had claimed that a company called Local Weather had deceptive advertising practices, pretending to be independent while actually being part of Blinkx. However, this was found to be untrue, with the real independent owner of Local Weather defending Blinkx.
Shares in Blinkx were trading down 1.8% at 27.00 pence Tuesday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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