Ben Edelman Vs. Blinkx, Round 3

ben-edelman-blinkxBen Edelman and Blinkx can’t get enough of each other.

Three months after Edelman – an associate professor at Harvard – swatted ad tech firm Blinkx for allegedly deceptive adware install practices, and three weeks after Blinkx hit back with a point-by-point rebuttal that also called out Edelman’s financial ties to clients who have shorted the company’s stock, the bell has dinged again and we’re into round three.

In an article published Thursday, Edelman documented some additional business activities ascribed to Blinkx and its partners. Those activities include bundling Blinkx ad-supported software in ways that allegedly mislead the end user. For instance, Edelman writes that one software bundle called “Flappy Bird,” after the popular mobile game, contained two Blinkx adware components but was missing the flagship product.

“It never provides the game the user requested and the offer purports to provide,” Edelman writes. “Any associated ‘consent’ to receive adware is therefore ill-gotten; as Softdlspro didn’t hold up its end of the bargain.” Softdlspro is Blinkx’s distribution partner in Edelman’s figuring.

Edelman has a long history taking shots at Blinkx – or rather at Zango, a now-defunct adware brand some of whose assets and employees were acquired by Blinkx in 2009. Edelman began writing about Zango 10 years ago, and his articles on the company’s deceptive adware practices helped inform a Federal Trade Commission investigation of – and eventual $3 million settlement with – the company.

Blinkx, which declined comment, maintains Edelman’s work is tainted by financial ties to people who are betting against the company – an assertion the researcher has done little to dispel. He admits the earlier Blinkx report draws on research that was paid for by a client, but declined to identify that party; he claims the paid work organically gave rise to the article.

“My agreement with the client did not oblige me to circulate my findings as an article or in any other way; to my
knowledge, the client’s primary interest was in learning more about Blinkx’s business, not in assuring that I tell others.”

Edelman’s latest missive comes with a disclosure on payments, through which Edelman also tries to distance his recent writing from his earlier articles.

“My testing of Blinkx ex-Zango adware began in 2004 with unpaid writing on my web site, and has grown to include paid and unpaid work for advertisers, ad networks, publishers, investors, and regulators. However, none of these requested or funded this article or any portion of the research presented in this article.”

The stakes are high for Blinkx, a publicly traded company. In the nearly three months since Edelman published his first article, its stock price has fallen more than 50%. Its late-March response to Edelman’s accusations coincided with a bump in its price, but it had fallen to $87.31 by Thursday afternoon, near its 52-week low.

While Blinkx is best known as the operator of a video search engine and discovery platform, it also has significant ad network holdings, including Burst Media (acquired in 2011) and mobile-focused Rhythm New Media (bought in 2013).

Why release a second Blinkx article so soon after the first? Edelman told AdExchanger that he has always published his ad industry research in clusters, and was also motivated by Blinkx’s public attempts to discredit him.

“Once Blinkx says I got it wrong, I sort of have to keep fighting them until the world comes to see it my way,” he said. “Once I’m sure I’ve got it right, surrender doesn’t seem palatable so I keep fighting.”

Update: An earlier version incorrectly stated Edelman admitted the first Blinkx report was paid for by an investment industry client. 

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