UPDATE: Late this afternoon, a Microsoft spokesperson indicated to BetaNews that its deal with Blinkx.tv may be significantly more limited than was stated in reports this morning.

"Microsoft regularly signs deals that enable flexibility in providing the best customer experience from a technical and consumer point of view," BetaNews was told. "In this instance, Microsoft signed an agreement that will allow their multimedia and online products to have the option to integrate Blinkx services if significant customer demand is there. At this time, there are no firm plans to integrate." The statement from Microsoft implies that Blinkx may play a role in such beta projects as Windows Live Video Search, but may not necessarily play a final role in any Microsoft product that emerges from the development stage, unless the company exercises that "option" explicitly.

A Blinkx spokesperson had earlier told BetaNews, "Blinkx will not be spidering and indexing any additional Microsoft content under the licensing deal, but will be making its index available through Microsoft properties."

Although officials from the video search engine Blinkx.tv apparently did sign a deal to provide video search technology to Microsoft, a Blinkx spokesperson told BetaNews this afternoon that an official had revealed the news to Reuters prior to the details of the deal actually having been determined.

The spokesperson thus declined to speculate about exactly what it is Blinkx will be providing to Microsoft until more is learned from both Microsoft and the Blinkx officials who supposedly put pen to paper.

BetaNews has contacted Microsoft's spokespersons, who are also trying to piece together news of the deal. Reuters reported this morning that Blinkx was preparing to make a formal announcement today; the company's spokesperson told BetaNews that data was incorrect.

The deal, when and if eventually confirmed, will raise to three the number of major content partners that Blinkx has signed on this year. In August, the company announced a partnership with AOL, which was very surprising since that company already owns its own video and search technology through outright acquisitions - Truveo and SingingFish, respectively.

But that partnership is limited to one project: StudyBuddy.com, a search engine for K-12 students with limited advertising and filtered links. Truveo technology currently powers AOL Video, the principal media portal for AOL.

Last February, Blinkx became the video search provider for British news broadcaster ITN. From ITN's portal, a submitted query for video takes the user directly to Blinkx.tv. There, the query is processed, and the site returns videos sourced only through ITN, unlike the StudyBuddy.com system where video is piped directly through AOL's pages.

At the time the ITN deal was announced, Blinkx officials told multiple sources that it would be funded through a unique revenue model, where advertising would be inserted into ITN videos, and Blinkx would receive a share of the ad revenues.

But when last we checked, ITN videos supplied through Blinkx were free of advertising, as was the page on which the video player is typeset, with the exception of links to other ITN items.

Reuters quoted Blinkx CTO Suranga Chandratillake as saying its deal with Microsoft is based on a fee determined by a flat multiple of how many Microsoft service users are compelled to use Blinkx' video search, and implying that this was the only fee involved. Blinkx' spokesperson confirmed those terms to BetaNews this afternoon, though could not add whether users referred from Microsoft would be searching Blinkx' content or Microsoft's, or whether Microsoft's existing video content would be integrated into Blinkx' system.

Blinkx will evidently have a lot more to say about this issue, and Microsoft may also make a formal announcement as well, although apparently had not planned to do so today.