LookSmart to Buy WiseNut Search Engine in $9.25 Million Deal

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Pay-for-placement search engine provider LookSmart yesterday said it will buy privately held search engine company WiseNut Inc. in a stock deal worth about $9.25 million.


LookSmart, San Francsco, will issue 4.1 million shares of LookSmart common stock in exchange for the outstanding stock and options of WiseNut. LookSmart did not say when it expects the deal to close.


With this acquisition, LookSmart eliminates a rival search engine company and gains improved technology. WiseNut, Santa Clara, CA, offers a search engine that combines contextual analysis with link analysis -- the practice of considering the number of outside Web sites link to a page to determine how popular that page is.


LookSmart charges advertisers a fee to be listed in its search engine and syndicates the results to Web portals and Internet service providers. With this acquisition, the company hopes to take on Overture Services Inc., which dominates the pay-for-position search market. LookSmart also faces competition from Google, which last month began syndicating its keyword-based ads and charging on a cost-per-click basis. Google uses similar search engine technology to WiseNut's.


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