New York — In a move that reflects a new strategy, Barry Diller’s IAC/InterActiveCorp which owns Ask.com has acquired Lexico Publishing Group, an Internet media company that owns sites that includes Dictionary.com in its latest effort to distinguish itself from online search leader Google and other much larger rivals.
“A similar attempt last year was made by rival site Answers.com, but the deal eventually fell through.”
In addition to acquiring Dictionary.com, Ask is also picking up Thesaurus.com and Reference.com in its acquisition of Lexico Publishing Group. Terms of the deal were not being disclosed.
“The deal was accomplished with the sites’ owner Lexico Publishing and the estimated sale price is around $100 million.”
With the addition of the widely used reference tools, Ask’s move is aimed at distinguishing itself from Internet search giants like Google, Yahoo!, etc. Ask said the acquisition will help it “super-serve” its core audience, while hoping to make more money showing ads to people looking for answers to basic questions.
“We want to [super serve] those people,” said Jim Safka, who runs Ask for its corporate parent, IAC/InterActiveCorp.
The acquisition made sense, because of their traffic and growth; there is so much inbound interest as more than 30 percent of searches conducted on their search engine are in the reference category, the company said.
The sharper focus on reference tools does not mean Ask is abandoning its role as a “general, multipurpose search engine,” Safka said. “This (acquisition) is not all we are going to do. It is the first tangible piece of the puzzle.”
According to comScore, more than half-a-billion monthly searches worldwide consist of dictionary, thesaurus, and encyclopedia queries. That represented a 20 percent increase from the same time last year.
Hence, the acquisition is expected to grow Ask Network’s user base by 11 percent, increasing its user count to over 145 million (not duplicated) monthly unique users (UUs) worldwide.
Ask.com has been combating intensely to remain a viable competitor in an industry overwhelmingly dominated by Google and Yahoo. Just last year only, it completely revamped its privacy policy, introduced the Ask.com front page by allowing users to place custom designs in the background and shifted its search algorithm twice.
The deal is also the fruit of a reversal of fortunes. Lexico agreed last year to a $100 million cash buyout from Answers Corp, home to Answers.com. That deal bogged down in March after Answers scrapped a stock offering needed to fund it.
“As soon as it fell apart, the next day I made a phone call,” Safka said in a statement. “They were excited. These guys saw the same fit that we did.”
Some of the material from Dictionary.com and other newly acquired reference sites will be featured at the top of Ask’s search results page devoted to “smart answers.”
Dictionary.com and the other reference sites will also get a financial lift from their new ownership. That is because they will be entitled to a bigger commission from the ads that Google displays on their sites under a contract that IAC negotiated last year, Safka said.
The buy will also expand Ask.com’s ad inventory, as Ask has relied on Google’s advertising acumen for much of its revenue for years, it has been investing heavily in upgrades aimed at boosting reach for its own advertisers as well as revenue through its relationship with Google.
Safka expects higher revenues from Lexico site ads as a result of the acquisition. “We are gong to be able to target much more closely depending on what the search terms are.”
Once the deal closes, likely in the third quarter, Safka expects Ask.com to quickly add new layers to the experience of Dictionary.com, such as its capacity to provide video clips and images alongside text entries.
Without providing specifics, Safka indicated Oakland-based Ask also will take measures to highlight more information about entertainment and health issues.
Safka took the helm at Ask in January and has since set in motion a series of steps to grow the business, whose search market share trails far behind Google and its distant rival, Yahoo Inc.
He expects new initiatives grown within the company to come to light late this year, as well as the potential for more acquisitions. Lexico itself was on a “short list” of companies that Safka has eyed to complement Ask.com’s business.