Answers Corp., creator of Answers.com, has entered into a purchase agreement to acquire Lexico Publishing Group, LLC, owner of the Web properties Dictionary.com, Thesaurus.com and Reference.com, for $100 million in cash. The transaction is subject to financing and customary closing conditions and is scheduled to finalize this fall.
Answers Corp. aims to grow its hold in the reference space. Answers.com saw 13.4 million US unique users in June 2007 while Lexico attracted about 11.5 million unique monthly users, according to comScore Media Metrix. Also, in 2006, Lexico had revenues of $7 million and a net income of $2.8 million.
“The combined properties would have reached over 22.5 million monthly unique visitors in June, ranking it as the 28th largest US properties, ranked higher than such well known Web properties such as ESPN, Chrysler or iVillage,” said Robert S. Rosenschein, chairman/CEO of New York-based Answers Corp. in a press call.
“We believe with these additional sites, and the much larger unique user base and the top 30 site status will provide us greater exposure among a broad group of online media buyers and advertisers that are attracting our direct ad sales,” he concluded.
According to Rosenschein, the key benefits of the acquisition include page views, as Lexico’s Web properties currently generate about three times the total page views of Answers.com. In addition, Lexico’s Web properties currently monetize at approximately one-third the rate of Answers.com.
In addition, more than 85 percent of Lexico’s traffic is direct from end users or people searching specifically for the term “dictionary” in search engines.
Rosenschein expects that the resulting shift in traffic mix will significantly reduce Answers.com’s current reliance on search engine algorithms.
“Lexico and Dictionary.com are both leaders in the online publishing market and represent highly complementary businesses,” remarked Rosenschein. n