It may just be the most expensive domain name so far.
The Answers Corporation, which runs Answers.com, just announced it has paid $100 million in cash to buy Lexico Publishing Group, a privately held California company whose main business is running the Dictionary.com site.
Dictionary.com is Lexico’s greatest asset. The site attracts 11 million users a month, and 85 percent of them come from people typing one of its domain names into their browsers. Lexico also runs Thesaurus.com and Reference.com.
Answers, by contrast, gets much of its traffic from search engines.
Now $100 million is no small amount, and it’s far more than the $4.2 in cash that Answers had on hand as of March 31. Answers says the deal is contingent on its raising the money, probably through a stock offering. Since Answers is only valued by the market at $101 million, the deal will substantially dilute the holdings of the existing shareholders.
Robert Rosenschein, the chief executive of Answers, said the acquisition will pay off because it will be able to earn much more advertising revenue from Dictionary.com pages than Lexico did.
“We’ve actually spent over 2 years playing with how to make money from AdSense from Google and display advertising,” he said. “They haven’t spent so much time on optimizing their advertising.”
In 2006, Lexico earned $2.8 million on sales of $7 million. Last year, Answers also had revenue of $7 million, but it lost $8.6 million.
“We are actually buying a business,” Mr. Rosenschein said. “It just happens to own a great domain.”