Answers.com Picks Up A Dictionary (.com) Priced at $100 Million

Answers.com & Lexico Publishing Group LLCAnswers Corporation[1] announced today that they have bought Lexico Publishing Group, LLC for $100 million.  Through the acquisition, Answers.com will attain web properties Dictionary.com, Thesaurus.com, and Reference.com.  The amount is fully in cash.  ANSW is profitable company that generated $7 million in revenue last year and has a current market valuation of $101.31 million through shares traded on the NASDAQ:ANSW.

“The acquisition of Lexico is a transformative event for us,” stated Robert S. Rosenschein, Chairman/CEO of Answers Corporation.  “We are excited about applying our experience in monetization to significantly increase Lexico’s 2008 revenues and EBITDA. Lexico’s suite of popular brands, steady direct traffic and loyal users are valuable assets that we believe will reduce our products’ reliance on search engine-driven traffic. Post-transaction, we estimate that over 70% of our total traffic will now be direct from end users or people searching specifically for the term ‘dictionary’ in search engines. Our combined size and available ad inventory should provide greater exposure among online media buyers, which we expect will lead to increased advertising sales.” 

By combining the web properties under the Answers.com brand, this would make Answer’s overall rank #2 in the category of Internet reference behind Wikipedia according to the press release.  Dictionary.com, Reference.com, and Thesaurus.com will join other Answers.com properties FAQFarm (acquired for $2 million in November 2006[2]) and Blufr[3]. 

Answers.com was launched in January 2005 and was previously known as GuruNet.  “Answers.com gets a lot of its content from Wikipedia, which they then use to generate advertising revenue. The site features a single search field, displayed prominently at the top of each page. User input is parsed using heuristics, which allows the site to display a selected list of possibly related pages that contain the search term. If the most-available mode is a dictionary entry, for example, Answers.com uses a dictionary data feed to supply the answer,” states Wikipedia’s description of Answers.com[4]. 

“Likewise, if the most-available entry is a medical term, Answers.com displays its medical data feed, and if the most-available entry is an encyclopedia entry, Answers.com displays commercial encyclopedia data, along with information obtained from Wikipedia in its status as a mirror site,” continues Wikipedia’s description.

I did a search of George Bush on Answers.com and data was aggregated from Who2, Oxford University Press, Answers.com premium partner, Britannica Concise Encyclopedia, Columbia University Press, Houghton Mifflin Company, and Wikipedia.  Perhaps we may start seeing some data aggregated by the 3 new properties that Answers.com acquired shortly. 

References:
[1] Answers.com
[2] Pulse 2.0: Answers.com Acquires Wiki Company, FAQ Farm For $2 Million
[3] Pulse 2.0: Blufr Beta: Don’t Get Bluf’d
[4] Wikipedia.org: Answers.com (Parsing method)

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at
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