Artivision Technologies Limited (KimEng)

Background: Artivision was incorporated in Singapore in 2004 and listed on the SGX-Catalist in August 2008. The company possesses a core proprietary computer vision technology, which it uses for two main businesses – video security and online video advertising

Recent development: There has been a strong interest in Artivision since it announced its new Facebook application, Advision. Advision displays advertisements in videos and still photographs shared by Facebook users and splits advertising revenue with the users. We invited management to conduct a live demonstration of the new application and to share its vision for this new business.

Our view:
- Social media as advertising channel. With about 600m registered users and growing, Facebook has become an effective way to reach out to the generation of today. Social media has its appeal, which makes Advision an enticing proposition for both Facebook users and advertisers. A thousand clicks would generate 50 cents for users while advertisers get to reach a large audience in a fast and effective manner.

- Keen interest from advertisers and Internet sites. Artivision said it has signed up about $0.5m worth of advertisements that are ready to be launched with the rollout of the application. Advertisers and other social media and Internet sites have indicated interest in the application. Though it is currently working with Facebook, Artivision said it is free to work with other social networking sites including those in China such as renren.com.

- A first-mover advantage. The heart of Artivision’s technology is the software in which the company has invested about $30m and eight years to build. For a competitor to come up with an alternative system, it might take at least two years, by which time Artivision would have already monetised on the opportunity.

- Could be the breakthrough it needs. There are no real profits for Artivision as yet and the company is in a negative equity position and may need to raise more funds. If Advision works out well, it could be the breakthrough the company needs. There is the possibility of a buyout from an Internet giant. Interestingly, Facebook has been known to acquire a company for talents rather than for the products. The endorsement by Facebook goes to show its appreciation of the product.