ex·pen·sive [ik-spen-siv]
–adjective
entailing great expense; very high-priced; costly: an expensive party.–Dictionary.com
It may just be the most expensive domain name so far.
The Answers Corporation, which runs Answers.com, just announced it has paid $100 million in cash to buy Lexico Publishing Group, a privately held California company whose main business is running the Dictionary.com site.
Dictionary.com is Lexico’s greatest asset. The site attracts 11 million users a month, and 85 percent of them come from people typing one of its domain names into their browsers. Lexico also runs Thesaurus.com and Reference.com.
Answers, by contrast, gets much of its traffic from search engines.
Now $100 million is no small amount, and it’s far more than the $4.2 million in cash that Answers had on hand as of March 31. Answers says the deal is contingent on its raising the money, probably through a stock offering. Since Answers is only valued by the market at $101 million, the deal will substantially dilute the holdings of the existing shareholders.
Robert Rosenschein, the chief executive of Answers, said the acquisition will pay off because it will be able to earn much more advertising revenue from Dictionary.com pages than Lexico did.
“We’ve actually spent over 2 years playing with how to make money from AdSense from Google and display advertising,” he said. “They haven’t spent so much time on optimizing their advertising.”
In 2006, Lexico earned $2.8 million on sales of $7 million. Last year, Answers also had revenue of $7 million, but it lost $8.6 million.
“We are actually buying a business,” Mr. Rosenschein said. “It just happens to own a great domain.”
See other bits posts on domain names here.
I was in Cupertino on non-Apple related business this week. Simply head on S. De Anza and make a right on Stevens Creek Blvd and you will see the networks attempt to switch and then ultimately your call will fail. Or while using the data connection you will get the notification stating that a data connection is not available.
This is less than a mile from the main campus at 1 Infinite Loop. I tried it 6 times and each time received the same failure. It just struck me as kind of funny that it happened so close to the HQ.
”
2007
8:05 am
I had been using Webster’s website because dictionary.com can’t get past my advertizing and pop-up filters.. Other then that it looks like a great site i can’t use. But 100 millions is beyond me to comprehend.
— Posted by Don Derk
2007
8:31 am
AdSense?! Their business model is to monetize Dictionay.com visitors with AdSense?! No wonder that Answers has been such a spectacular disappointment, with strategic thinking like that. Only Google benefits from AdSense.
What Answers really needs is a strategy. How about this: generate some real content about each vertical you cover. Then act as focal point on the web for each vertical by linking to other people’s vetted, high-value content. THEN you have earned the right to sell targeted ads (partner with an ad network!).
Selling AdSense ads on Dictionary.com is a very, very weak idea.
Nice reporting on this story.
— Posted by Joe Breen
2007
8:45 am
I thought that dictionary.com was the fossilized pre-cursor to wikipedia.
Seems to me that wikipedia wins and dictionary loses.
Strategy in previous comment is a good one, but how about this for dictionary? Just add a toolbar window to your browser. Who wants to type the word “dictionary.com” into anything?
Also, figure out how to join the contextual relevance revolution.
See a word you don’t know? Why not “right click” on it and be taken immediately to dictionary.com for the answer (or wherever you want).
These are just product ideas from an average reader; how come they haven’t tried any of them?
— Posted by Tim Lear
2007
9:03 am
Got to agree with Joe there. $100 mil and your plan is to drop in some adsense code? Optimization can only get you so far.
— Posted by Carl Thomas
2007
9:49 am
Market cap is $101 mil and they will pay $100 mil?? I predict that this stock will drop like a stone at the open!
-Beth T.
Rumson, NJ
— Posted by Beth Turner
2007
10:37 am
It’s insane these such companies as answer.com is even worth that much to begin with. These companies are working with money they don’t have to make stupid deals with stupid ideas. If dictionary.com turns into anything like answers, its time for a new site.
— Posted by Jamal Rahman
2007
10:51 am
“We are actually buying a business,” Mr. Rosenschein said. “It just happens to own a great domain.”
That says it all.
— Posted by Joseph
2007
1:08 pm
joe and tim got good points. i like the joke emphasis from joseph. we spend all this money to do ad sense, what a joke. beth also has a good joke- i really do wonder. 101million -100 million in debt- whats left. lol. how it is worth 101million is beyond my calculations. its all intellectual property.
— Posted by john doe
2007
2:30 pm
OMG.
now i’ve heard it all.
spending $100 MILLION to try and make 5 cents a click. Good luck with making a profit.
— Posted by Dave T
2007
9:52 am
Embed links in each definition and translate each definition into every language and turn Dictionary.com into a global search engine that sells targeted advertising…….. Watch out Google.
— Posted by Palm Beach
2007
10:46 pm
I actually believe that this will be a profitable decision in the long run. It sure won’t come quickly, but the value of the domain is so high, long-term, that I think it’s a perfectly reasonable investment.
— Posted by Eric
2008
10:29 pm
I think this represents the power of generic domain names, I use Dictionary.com - Its fast, simple and easy.
— Posted by Gene Downs