Since paying $1.65 billion for YouTube three years ago, Google (NASDAQ: GOOG) has made progress. No doubt, the site is a dominant player in video -- especially for user-generated content. And Google is enhancing the platform, such as with better ad formats, as well as distribution partnerships with companies like Disney (NYSE: DIS).

However, investors want to know when the site will start to make profits.

A couple years ago, Suranga Chandratillake started Blinkx. The goal was to make it easier to search for online videos. Interestingly enough, he got a lot of pushback.

Of course, things are a lot different now -- especially with Google Inc.'s (NASDAQ: GOOG) purchase of YouTube.

Well, this week, Blinkx took another important step: The company went public on the London-based AIM exchange and raised about $50 million.

On the first day of trading, the stock price surged 40% to 65 pence, and the company has a market cap of roughly $355 million.

So far, Blinkx has deals with 130 media partners and has indexed more than 12 million hours of videos.

Because of the "quiet period," I can't talk to Suranga. But when it expires, it will definitely be interesting to get his observations on the process.

Check out the recent BloggingStocks interview with Suranga.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Recently, I talked to the founder and CTO of Blinkx, Suranga Chandratillake. When he started his video search service a couple years ago, many people were skeptical.

Of course, that's no longer the case – especially in light of Google's $1.65 billion purchase of YouTube.

"But searching video is still a tough problem," said Chandratillake. And even the mighty Google Inc. (NASDAQ:GOOG) is coming up short.

The acquisition of YouTube should help with the effort. Google will also learn how to deal with complex content licensing issues, as well as scaling infrastructure for the heavy bandwidth requirements of online video. Oh, there is also the challenge of finding ways to monetize the stuff.

For the most part, video sites let their own users tag the content. While this generally works with sites like Flickr and other Web 2.0 properties, it is far from perfect. Actually, it is often the case that users enter little or no information about their videos. Rather, the users just want to quickly post the content.

Another big problem: some users will put misleading tags on videos. This is a way to help juice traffic. But, of course, it means the search results are essentially irrelevant.

As for Blinkx, it has developed a system that uses voice recognition to build search indexes for online video -- as well as facial recognition. And, it is working fairly well – as the company has been signing a variety of major deals, such as with Lycos and even Microsoft.

True, Google has thousands of smart programmers who can come up with video search technologies. But, as seen with its original video sharing service, the in-house-development approach has its limitations.

Besides, given the fact that video is critically important for Google's growth, it's a good bet the company is going to buy up more companies in the space. And its major competitors – like Yahoo Inc. (NASDAQ:YHOO) and Microsoft Corporation (NASDAQ:MSFT) – will also open their checkbooks. In fact, Google recently purchased a facial recognition company, Neven Vision.

In other words, there are a variety of upstart video search companies in play. Besides Blinkx, it would not be surprising to see others like Metacafe, PureVideo Networks, and PodZinger get scooped up.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.