Google's Mysterious Video-ID Partner Nexicon

(MoneyWatch)  Google is hoping to perfect YouTube's video identification system with the help of a company that hasn't filed financials with the Securities and Exchange Commission, has a convoluted history and is run by a self-proclaimed "natural born content pirate."

And oh yeah this company?€"Nexicon?€"is a penny stock. Nexicon trades as a "pink sheet," an illiquid and risky stock from a company that can't meet the requirements of a major exchange.

That little tidbit?€"part of our special report ZDNet Undercover: The YouTube File?€"remains the biggest head scratcher of the entire 15-page report. Why would Google entrust something as important as its video ID system to a company that just seems off?€"at least to me.

Also see: YouTube: Does your video ID system really work?
Nexicon for its part says it can deliver what Google needs. Google isn't commenting. But the history of Nexicon alone would give me pause. Nexicon used to be Pluto Communications, a Bergen, Norway company. Pluto merged with the predecessor to Nexicon to go public. Nexicon used to be known as Cyco.net, an online seller of cigarettes.

Nexicon officials in the special report say that the company is completely different and only share a tax ID number. But much of the management is the same. Cyco.net and Nexicon are run by the same people.

Download: YouTube's video ID system: Is 75 percent accuracy good enough? Video ID system cost benefit and revenue calculators. (15-page special report includes: Executive checklists, YouTube's vendors and analysis.)

Perhaps Nexicon has great technology. Perhaps the company's history doesn't matter. And perhaps Nexicon is doing a great job. But when you're the biggest Internet company in the world Nexicon isn't the type of company you hang out with. It's not too often that a company with a market cap of $110 billion depends on one with a market cap just shy of $4 million.

Here's a look at Nexicon's performance under the ticker NXCO via Google Finance.


Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
Credit: ZDNet