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Answers Corporation (NASDAQ: ANSW), creator of Answers.com(TM), announced today that it has entered into a purchase agreement to acquire Lexico Publishing Group, LLC, owner of the popular 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 be completed by fall of this year. Lexico is a highly profitable company that strongly complements Answers' user base. In 2006, it generated revenues of $7 million, EBITDA of $2.9 million and net income of $2.8 million. This strategic acquisition drives Answers to a leadership position in online information publishing. Key benefits of 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. - 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. "The acquisition of Lexico is a transformative event for us," explained Robert S. Rosenschein, Chairman and CEO of Answers Corporation. "We are excited about applying our experience in monetization to significantly increase Lexico's 2008 revenues and EBITDA. Lexico's suite of popular brands, steady direct traffic and loyal users are valuable assets that we believe will reduce our products' reliance on search engine-driven traffic. Post-transaction, we estimate that over 70% of our total traffic will now be direct from end users or people searching specifically for the term 'dictionary' in search engines. Our combined size and available ad inventory should provide greater exposure among online media buyers, which we expect will lead to increased advertising sales." About Lexico Publishing Group: Lexico is a world-class online provider of reference content, commanding approximately 11.5 million unique monthly users in the U.S. for the month of June 2007, ranking it the 74th most visited site on the web, according to comScore Media Metrix. Its properties include Dictionary.com, called "the best general English-language dictionary online" by Web Guide magazine; Thesaurus.com, an award-winning online version of Roget's Thesaurus of English Words and Phrases; Reference.com, an online encyclopedia, almanac and Web guide; and CleverKeys, software that gives instant access to our services from almost any program on Windows or Macintosh platforms. In addition, Lexico owns and operates a number of domain names, including Words.com, Spelling.com and Websters.com, among others. About Answers Corporation: Answers Corporation owns and operates Answers.com, an Internet information portal that provides users with answer-based search services covering various topics, such as art and literature, biographies, business, entertainment, food and drink, general encyclopedias, health and wellness, history, law, reference, science and technology, and travel and leisure. It also operates Wikianswers.com, which is a Q&A platform where users ask various questions and a community of people answers them. In addition, the company offers 1-Click Answers, which is a software application tool that facilitates access to Answers.com. 1-Click Answers allows users working in various applications, such as e-mail, spreadsheet, word processing, and database to click on a word or phrase within a document and access Answers.com’s online library that provides information in a pop-up window. The company was founded in 1998 and is headquartered in Jerusalem, Israel with an additional office in New York, New York.
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