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May. 15, 2008 at 8:29am Eastern by Greg Sterling
Ask.com Buying Lexico, Owner Of Dictionary.com
In a move that is interesting and perhaps even surprising for several reasons, IAC/Ask is buying Lexico Publishing Group, which owns and operates "iconic" domains Dictionary.com, Thesaurus.com and Reference.com. These sites get most of their traffic through direct navigation and will increase Ask's reach by 145 million unduplicated users (or 11 percent). Ask is saying this will make it the ninth most visited property online, ahead of Facebook.
There was a deal on the table to buy Lexico last year from Answers.com, but it fell through. Answers was partly trying to buy Dictionary.com's direct traffic.
That deal was valued at $100 million, so one might assume that Ask is paying something near that. However, Ask representatives would not reveal the price of this deal, but they said that, as a public company, it wouldn't have any material impact on revenues, which would otherwise trigger disclosure of the purchase price.
I was told that the second most popular query on Ask in 2007 was "dictionary." Ask said, accordingly, one of the reasons this deal makes a lot of sense is because of the popularity of "reference searches" on Ask. Another is just the huge traffic volumes on the Lexico sites.
Ask will be putting search and related tools on the Lexico sites that will expand their functionality and capabilities. You'll also see Ask powering search on these sites. Overall, it will give users of Dictionary.com, etc. direct and indirect exposure to Ask.
Here are the "key facts" that Ask included in the press release:
Lexico’s key strengths include:
--15.6 M monthly UUs, growing 29% year-over-year, March 2008 (comScore)
--Lexico sites grew three times faster than the global search market year-over-year, March 2008 (comScore)
--Profitable, high double-digit growth for the past two years
--88% of traffic consists of users who directly type Lexico sites’ URLs into their browsers, demonstrating brand strength and minimal reliance on intermediary sites
That last fact is particularly important, as Ask gets traffic it doesn't have to pay for and will benefit from the related ad placements on those pages.
IAC CEO Barry Diller said exactly a year ago that he was willing to spend $100 million to market Ask to the public. This acquisition would appear to be a much better use of that money.
Note From Danny: Checking quickly, Dictionary.com ranks tops for a search on "dictionary" at Google and Microsoft and in the top results at Yahoo. So the purchase should bring the Ask network some nice search traffic -- unless, you know, the major search engines decide to change up how they handle searches for dictionary terms and instead provide direct answers. You know, in the way that Ask does.
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By Greg Sterling
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