Blinkx, the British internet search company, today launched an online video service to challenge Yahoo! and Google, the American giants planning to dominate the fast-developing market.

The privately owned company has formed a partnership with ITN, the news producer, to make video content searchable online. In a first for the search specialist, revenues will be raised through advertising.

Blinkx had been linked to a string of potential suitors, including News Corporation, the parent company of Times Online. However, the move to host advertising has led insiders to suggest that the British company, already lauded as a pioneer in the search market, could now resist any takeover attempt.

"They are not actively looking to get bought and are signing more deals with content providers and are launching new services – such as the advertising model to begin to monetise blinkx," a source close to the company said.

Users of the ITN service will be able to search an archive of video clips through a voice recognition system that blinkx has spent several years developing.

The company hopes its technology, which has been used by the US Department of Homeland Security to eavesdrop on al-Qaeda terrorists, will give it an edge over its much larger American rivals. Google recently ran into problems with its own video search service, which attracted critical reviews from investors when Wall Street analysts found that it frequently broke down.

Blinkx also plans to use the ITN model, where advertising revenues will be split between the two partners, as a base for expansion. The company has deals that do not involve advertising in place with content providers such as Forbes and BusinessWeek, publications based in the print market which have used blinkx to move into video.

Suranga Chandratillake, Blinkx’s co-founder and chief technology officer, told Times Online: "The CNNs of the world already have the technology and the sales teams to launch their own, self-contained products. But there is a significant market for smaller content providers. We believe we can play a major part in bringing them to the web and making them searchable."

The blinkx system will also give advertisers the opportunity to target different consumers with marketing campaigns. Relevant adverts could also be attached to particular news clips, Mr Chandratillake said.

"For example, if there is a story about Luton Airport being out of action, we could run ads showing people how to get to Gatwick."

Online video services are being widely touted as a crucial next step for internet companies. Yahoo!, the internet portal business that owns the world’s most popular website, has already taken the step of commissioning video content to use online.

Meanwhile, Google, the leader in online advertising, was last week hit by suggestions that text-based markets are approaching maturity in territories such as the UK.

As shares in Google slumped 10 per cent after the company failed to hit Wall Street’s ambitious growth targets, analysts looked forward to the revenue potential of the group’s video services.

Analysts from Morgan Stanley said: "The thing we were most excited about was the launch of Google Video … In spite of the glitches, the product is fun, and history has proven that fun can be monetised."

Blinkx already searches content from Reuters, the largest producer of television news, and claims that raw footage from the news agency can be searched on its site within one minute of being shot.

The new service can be accessed at www.itn.co.uk and www.blinkx.tv.

To have your own say on Google, visit the Times Online technology blog.

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