A day after AOL acquired video search startup Truveo for an estimated $50 million, the other closely watched video search firm, Blinkx, said Wednesday it has no plans to put itself up for sale although it intends to receive investment from one of the larger Internet or media companies.

“We’re in the middle of talking to VCs and some of the larger companies and players investing potentially in our organization,” said Blinkx co-founder Suranga Chandratillake. “We have to juggle and figure out who can bring the most to the table.”

Mr. Chandratillake declined to provide any names of potential investors. He and five other co-founders own the majority of the company.

Analysts and experts have long regarded Truveo and Blinkx as the most impressive startups in the video search industry, and speculation over possible takeovers has consistently dogged both firms. AOL bought Truveo Tuesday (see AOL Buys Video Search Startup) for what sources familiar with the deal say was $50 million, leaving Blinkx as an obvious acquisition target.

As an increasing amount of video content moves online, video search is fast becoming the next frontier pursued by large as well as small media, Internet, and search companies. Research firms have also been predicting that online video ads will become increasingly popular over the next few years, generating $1 billion in revenue by 2008 (see Online Video Ads Surging). 

“Multimedia search is going to be the next frontier,” said Youssef Squali, an analyst with Jefferies & Co. “All of [the big Internet and search players] are thinking about it.”

And these big players are also weighing the pros and cons of building their own video search products vs. buying existing offerings, say analysts.

Possible Suitors

There was speculation late last year that Rupert Murdoch’s News Corp. was talking to Blinkx about a possible purchase. While Mr. Chandratillake declined to comment on the talk, he reiterated that he had spoken to the prominent Internet, media, and software companies.

“As a smaller player, we have to talk to big partners,” he said.

One analyst believes Yahoo could become interested in Blinkx. Both Yahoo and its search engine rival Google have video search services, which garnered a fair share of attention at the International Consumer Electronics Show last week (see Yahoo, Google Add New Choices). At the show, Yahoo announced it was making it possible for its consumers to access its video content across devices, while Google launched a video store.

Google’s video store move could prompt Yahoo to come up with its own such offering, said Todd Chanko, an analyst with JupiterResearch, and Blinkx might help Yahoo achieve its goals.

“I would think if there’s a credible company out there—if Blinkx is a good robust engine—I would imagine Yahoo would be the player here,” said Mr. Chanko.

Mr. Chanko doesn’t believe Google will buy Blinkx, given its emphasis on building its own technologies.

Another possibility? IAC/Interactive CEO Barry Diller is a proponent of buying technology instead of building. As his search company Ask Jeeves seeks to gain market share, buying a startup that has one of the best-reputed video search technologies in the market might be one of the many things he could do.

Ask Jeeves is working on its own engine, though it does have an existing relationship with GoFish, a San Francisco-based multimedia search engine.

Flying Solo

Blinkx might be getting more valuable as it seems to be figuring out a way to make money.

Mr. Chandratillake said his company would soon be revealing its revenue model, a rarity in this relatively young industry. Whether the model is based on advertising or subscriptions, the bigger companies will surely want to hear about it.

Although Mr. Chandratillake has expressed an interest in remaining independent, the pressure to sell at some point may become too great. While it isn’t impossible for a startup to survive in the face of competition from the likes of Google and Yahoo, it’s certainly not easy. And the giants might be willing to acquire the competition, regardless of the price.

“If you have a technology or platform that stands out, or some sort of unique aspect, you’re going to get bought,” said Greg Sterling, an analyst with The Kelsey Group. “Competition is so intense. It’s going to be the big brands that are going to own most of the consumer traffic, and are going to want to own most of the proprietary technologies out there.”