Brightcove preparing for IPO in 2011: source

NEW YORK (Reuters) - Online video publisher Brightcove is preparing for an initial public offering in the first half of next year, according to a person close to the company.

Brightcove, which helps media and marketing companies distribute Web videos across the Internet, is betting on a dramatic increase in the use of video as a communication tool by a wide range of companies, including those in retail and education.

The company has recruited Chris Menard as chief financial officer from Phase Forward, a mid-sized software company.

Chief Executive Jeremy Allaire said the company was attracted by Menard’s experience at Phase Forward and his previous work with acquisitions, another strategic priority of Brightcove. Phase Forward was bought by Oracle in August for $685 million.

“Chris is a very talented rising star with great experience as public company CFO at a business with a similar model in software-as-a-service,” Allaire said in an interview.

Menard is the latest in a string of senior executives who have joined Brightcove this year, including President David Mendels, who came over from Adobe Systems in January.

In addition, former Macromedia CFO Betsey Nelson has joined the Brightcove board. Both Allaire and Mendels worked with Nelson at Macromedia.

“These appointments underscore that we’re building a significant global independent company,” said Allaire.

He declined to comment on whether the company was lining up an IPO, but the source close to the company said plans are in the works to go public in the 2011 first half.

The company says its revenue has grown by 50 percent year-on-year and is expected to hit about $50 million this year.

Brightcove’s rivals include Comcast Corp’s the platform unit, but Allaire said the company is gearing up for competition from much larger companies, including Google Inc, Microsoft Corp and Akamai.

“My expectation is that over the next year any number of large publicly traded Internet companies will try to get into this market either organically or through acquisition,” he said.

Allaire is keen for his company, which has raised about $100 million in venture funding to date, to take advantage of consolidation in the market.

“We’re seeing very real opportunity for M&A, we’re very well capitalized as a company and are valued highly,” he said.

Brightcove is looking for acquisitions that will help it improve its market share, differentiate its technology and recruit new talent, he added.

Earlier this year there was speculation that Brightcove might be a Google acquisition target. Allaire declined to comment on that.

Reporting by Yinka Adegoke; editing by John Wallace