2nd Jul 2014 06:55
LONDON (Alliance News) - Blinkx PLC said Wednesday its earnings before interest, tax, depreciation and amortisation will be around USD5 million below management expectations, as it saw lower demand than expected in its Desktop division.
The company, which provides companies with advertising for use with online videos, said as a result of this lower demand over the last three months it has seen a shortfall in revenues and EBITDA.
The firm attributed this to "industry-wide issues of efficiency and effectiveness", which it said had been compounded by the lingering effects of a disparaging blog about its business in January.
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.
The article resulted in Blinkx shares almost halving, and the company said Wednesday that it had led to a slower than expected return of demand.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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