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News > Technology
Ask Jeeves takes Direct Hit
January 25, 2000: 2:47 p.m. ET

Web site buying Internet search engine technology firm for $507M in stock
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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. Back to top
    -- from staff and wire reports

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.