Ask Jeeves buys Direct Hit – Jan. 25, 2000 #ask #jeeve


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NEW YORK (CNNfn) – Internet search site Ask Jeeves Inc. disclosed Tuesday it will acquire privately held Direct Hit Technologies Inc. a Web search engine firm, for stock valued at approximately $507 million.

Terms call for Ask Jeeves’ �(ASKJ ) to exchange 5.12 million unregistered shares of common stock for all outstanding shares, warrants and options of Direct Hit.

Based on Monday’s closing price of 99 for Ask Jeeves shares, the transaction is valued at $507 million. The stock was up 3-1/4 at 102-1/4 in Tuesday afternoon trading.

After the acquisition was announced, CS First Boston initiated coverage of Ask Jeeves with a buy recommendation, and set a year-end price target of 215.

The acquisition was approved by the boards of both companies, and is expected to be finalized in the first quarter of this year.

The Ask Jeeves Web site allows users to type in questions about subjects using natural language and returns answers to them based on the most popular results from other queries conducted on the Internet. Direct Hit compiles and organizes online content via its Popularity Engine, which anonymously aggregates information collected from online users.

Ask Jeeves said it plans to add Direct Hit’s popularity-based search, directory and shopping products to its corporate service, aiming to provide companies with more comprehensive services.

First Union analyst Carolyn Trabuco told CNNfn she thought the Ask Jeeves/Direct Hit union was a good fit.

This is a great acquisition, a really forward-looking move, Trabuco said. Direct Hit is one of only a few next-generation search engines that can almost predict what you’re looking for on the Internet.

Ask Jeeves also said the acquisition will provide it with a new business line through expanded syndication of Direct Hit’s popularity-based search service.

Direct Hit will allow Ask Jeeves to answer more questions and give more-refined answers, First Union’s Trabuco said.� It will help on the consumer side but really help the corporate side. It’s a natural fit.

Wellesley, Mass.-based Direct Hit syndicates its services to companies including AT T WorldNet, About.com, Apple Computers, Microsoft, Go2Net, InfoSpace.com and ZDNet.

Last Dec. 22, Direct Hit filed for an initial public offering of $57.5 million, with Robertson Stephens as lead underwriters.

— from staff and wire reports


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