Autonomy to Demerge Consumer Unit; Will Offer IPO as blinkx plc

Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software for the enterprise, today announced that after years of successful research and development it is to demerge its consumer division, which is expected to be floated on the London Stock Exchange’s AIM market.

Autonomy’s consumer division is formed from Autonomy’s research and development related to the application of Autonomy’s award-winning IDOL technology to the consumer space, and blinkx. As part of the demerger it will be renamed blinkx, and floated as blinkx plc., following exercise of an option over shares in blinkx, Inc., a privately held company.

Throughout its eleven year history Autonomy has lead the industry in research and development investment and innovation. As part of that investment, Autonomy has dedicated significant resources to consumer applications of its core technology. That technology underlies Blinkx plc, the world’s leading video search engine, together with blinkx’s investment in adapting this and its own technology for the consumer sector.

The consumer unit, to be listed as Blinkx plc, is to be demerged from Autonomy as blinkx’s focus on consumer-directed search services differs from Autonomy’s focus on enterprise applications, and as a result the companies address different markets and clients. As an independent company, Blinkx plc will be better positioned to focus its resources on its own client base. In addition, and in connection with its client enhanced focus, the demerger will aid blinkx in continuing to establish its brand and identity.

Commenting on the demerger and blinkx’s announcement of its intention to float, Dr. Michael Lynch, CEO of Autonomy said: “Autonomy has invested over $150 million in its core IDOL technology. Recently we have expended further effort in applying our technology to the challenges of the consumer market. Having taken the consumer applications through the development phase and into commercial roll-out, now is the right time to split these activities from our core enterprise software business. They clearly have different market characteristics and funding requirements and we believe that shareholder value can be more quickly advanced as separate entities. I am delighted to be retaining a non-executive role in this business which I believe shows many of the same characteristics and potential as Autonomy in its early days.”

Suranga Chandratillake, Chief Executive Officer of blinkx, comments: “I am excited to have access to such an advanced technology portfolio at a time when the ways people use and consume information of all types is changing both rapidly and radically. The development of television, for example, is at a pivotal moment - technologies such as IPTV, on-demand, non-linear, personalization and implicit query are expected to significantly change how consumers interact with content. The first of our many applications of IDOL’s unique meaning-based technology addresses this area. Autonomy’s technology made it the world leader in the enterprise space, and we believe the same technology arms blinkx for success in this new, complex rich media environment.”

The demerger is expected to be effected in a tax efficient manner and will result in the payment of a dividend in specie of Ordinary Shares in Blinkx plc to the shareholders of Autonomy. The demerger will be effected in connection with a flotation of blinkx. As a result of the demerger Autonomy shareholders will continue to hold their shares in Autonomy.

Shares in Blinkx plc are expected to start trading as a separate company in May 2007. After the demerger and any associated offering, Autonomy is expected to hold approximately 10% of Blinkx plc’s ordinary shares.

More details regarding blinkx and its business, and the flotation, will be included in separate releases to be issued in due course. The demerger will be subject to, inter alia, tax clearances and other customary conditions. Full details of the blinkx shares will be included in the Admission Document to be published in due course.

AUTONOMY CORPORATION
Editorial Contact:
Suranga Chandratillake
(415) 848-2986