Blinkx blames hostile Harvard blog for profit warning

Guardian Web |

Blinkx shares plunged after the online advertising company blamed a profit warning on the continuing effects of a hostile blog written by a Harvard professor.The company's shares fell almost 45\% to 36.75p. The shares are down 77\% since 30 January when Ben Edelman of Harvard Business School posted a blog headed "the darker side of Blinkx". He alleged that the company used "black-hat practices" to deceive its advertisers and charge for unseen content.In a trading update, Blinkx said it suffered weaker than expected demand for its services in the second quarter of the year.General industry wariness about the effectiveness of some online advertising was made worse in its case by Edelman's blog. Blinkx has rejected Edelman's allegations."We attribute this performance to industry-wide issues of efficiency and effectiveness, which, in our case was compounded by the lingering effects of the disparaging blog about the company. This resulted in a slower than expected return of demand, despite earlier signs of normalisation."Though revenue increased 5\% in the first half of the year, earnings will be lower than management expected, Blinkx said.

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