• by Laurie Sullivan , Staff Writer @lauriesullivan, November 9, 2011

Video search engine blinkx will acquire digital marketing agency Prime Visibility Media Group (PVMG) for $36 million in cash. The company plans to partially fund the acquisition by placing new stock shares.  

PVMG's platform, which gets about 1.5 billion queries and generates about 14 ad interactions each day, will support the ability for blinkx to deliver videos in search results. The company serves a network of more than 600 advertisers and 350 publishers.

Universal search results on engines like google.com require technology that can sort through billions of videos online. ComScore estimates that 182 million U.S. Internet users watched nearly 40 billion video views in September, for an average of 19.5 hours per viewer.

Blinkx Founder Suranga Chandratillake said developing technology similar to PVMG would have required financial resources and time. In fact, lots of it -- between two and five years.

Chandratillake expects that integrating the two platforms based on search technology should go smoothly, but will require extensive testing. He expects integration by December 2011, but it could take another year through experimentation "to get it just right."

PVMG also operates a digital marketing agency, complete with consulting services such as search engine optimization (SEO), search engine marketing (SEM), social media, email, and mobile marketing.

PVMG CEO S. Brian Mukherjee will join blinkx as EVP and GM for Search and Mobile. Mukherjee also serves as managing director to his company Zen Capital Partners, according to his LinkedIn profile.

The cost for California-based blinkx, which is listed on the London stock exchange, to restructure and integrate PVMG will run about $2.5 million, compared with $4.5 million market prediction, the company estimates.

Founded by Chandratillake in 2004, blinkx went through an initial public offering (IPO) on the London Stock Exchange (AIM) in May 2007. The company expects to report that Q3 2011 revenue rose more than 60% to $44.6 million for the first six months ending in September, compared with the year-ago quarter. Operating profit also rose 95% to $4.9 million.

Video targeting company Alphabird also made a recent acquisition, acquiring Media Social, which distributes viral video marketing campaigns.