10-K Watch: Answers.com: $925K In Reimbursements For Failed Lexico Bid; $2.6 Million Total Charge

This story was written by Joseph Weisenthal.
Reference service Answers.com's (NSDQ: ANSW) failure to close the acquisition of Dictionary.com parent Lexico, as a result of an inability to secure financing, cost it $925,000. According to the company's 10-K, $500,000 was given to the would-be sellers, while another $425,000 was paid to an unidentified institutional investor that had committed $8.5 million of financing for the deal. That financing was contingent on Answers.com completing a private share sale, which never happened. What's interesting is that the agreement with the investor occurred in mid-January, less than one month before the ultimately collapsed. And it had looked likely, as early as last Autumn, if not before, that the deal was threatened. Other costs associated with the failed bid came to $1.7 million. Altogether, the company says it will take a $2.6 million charge.

-- The filing also breaks down the sources of its traffica sensitive issue for the company, which got slammed when Google (NSDQ: GOOG) changed an algorithm. 65 percent comes from general search engine queries, while another 10 percent comes from Google's definition link, an informal thing that could be pulled at any time. Another 25 percent comes from direct traffic, links from other sites and its AnswerTips service.


By Joseph Weisenthal