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Answers Buys $100M Dictionary. Really.




Answers.com announced today that they’ve acquired Lexico Publishing Corp, which includes Dictionary.com, Thesaurus.com and Reference.com, for $100M cash.

Answers reported that their reasons for the acquisition include:

  • Page Views: Lexico’s Web properties currently generate approximately three times the total page views of Answers.com.
  • Monetization: Lexico’s Web properties currently monetize at approximately one-third the rate of Answers.com, presenting material revenue upside. [With $7M in Lexico revenues in 2006, that's a nice base to be growing from, too.]
  • Direct Traffic: Over 85% of Lexico’s traffic is direct from end users or people searching specifically for the term “dictionary” in search engines. The resulting shift in traffic mix should significantly reduce Answers.com’s current reliance on search engine algorithms.
  • Market Leadership: Based on the June 2007 comScore data, the addition of Lexico’s Web properties will increase Answers reach to over 22.5 million monthly unique users, which would rank #28 in the top U.S. properties.

Am I reading this right? Because more than 85% of Lexico’s traffic is direct or from the keyword “dictionary,” this acquisition is going to decrease their reliance on search engines? When searchers are looking for “dictionary”–a term in the domain name–and your new properties are in the top three on the the big four, why not enjoy it?

I’m all for defensible traffic, but I just don’t get the reasoning here. Sure, you don’t want to mortgage your online future, but how is acquiring a company with a significant proportion of their traffic coming from search going to reduce your reliance on search engines?

(via)

  • http://www.jaankanellis.com Jaan Kanellis

    I assume the dictionary.com property gets a ton of traffic from “keyword” definition to. I know I spot them all of the time for this.

  • http://microsoft.blognewschannel.com Nathan Weinberg

    I’m guessing they mean reduce their reliance on search engine marketing and advertising. If Dictionary.com is getting all that traffic, they spend less on ads, and the money saved will contribute to making the acquisition worth the price.

  • http://www.linkedin.com/in/lucasng shor

    I guess you could say the acquisition reduces the Answerz group’s reliance on volatile search traffic.

    85% of dictionary.com’s traffic comes from direct type-in/bookmarking or people searching for the exact term ‘dictionary’.

    This domain-to-keyword-based search traffic and direct type-in traffic is highly defensible in the current world of SEO – a lot more so than Answerz competing with the likes of Wikipedia for long tail search referrals.

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