January 25, 2000 7:30 AM PST
Ask Jeeves to acquire Direct Hit for $506 million
Ask Jeeves said it will offer 5.12 million shares for all outstanding stock, warrants and options of privately held Direct Hit's Popularity Engine. Based on Ask Jeeves' closing stock price yesterday of $99, the deal is valued at $506 million.
Ask Jeeves' shares rose to $105 in early trading on the news.
Emeryville, Calif.-based Ask Jeeves said it will use Direct Hit's Popularity Engine to help companies provide a broader set of answers to their customers online.
The deal gives Direct Hit about a 12 percent pro forma ownership stake in Ask Jeeves. Both boards have approved the deal, which is expected to close in the first quarter of 2000.
Direct Hit technology monitors Web user traffic across the Internet or within a company's Web site to identify the most popular Web sites.
Ask Jeeves said that when completed, the acquisition will offer the company new opportunities in business-to-business and business-to-consumer markets through the syndication of Direct Hit's Popularity Engine. Direct Hit already provides its service to companies such as AT&T WorldNet, About.com, Go2Net, InfoSpace.com and ZDNet.
"The technology we gain through this acquisition will allow us to combine human insight with advanced automated technology that can be scaled and implemented on company Web sites across the Internet," Rob Wrubel, Ask Jeeves chief executive, said in a statement. "Now we can offer corporations an automated, intelligent service driven by customer preferences that can be up and running quickly."