Answers Corp. pays $100 a word for Dictionary.com

According to The Global Language Monitor, there are 988,968 words in the English language. Yesterday, Answers Corp. (NASDSAQ: ANSW) paid $100 million for Lexico Publishing Group LLC, owners of the internet's most used dictionary, Dictionary.Com. Thesaurus.com and Reference.com were also included in the deal. The company will sell off $140 million of its stock to cover the cost of the purchase.

Answers Corp. is attempting to become the go-to advertising-supported free reference site on a far-flung body of topics from Supreme Court decisions to Bible lexicon, company histories to travel guides. To differentiate itself, its strategy is to aggregate branded, authoritative, content from companies such as AccuWeather, Thomason Gale, Britannica, and Barron's.

They are also pursuing the user-generated content market that Wikipedia established with its recent purchase of Wikianswers.com. In total, Answers.com averaged 4.86 million queries in the first quarter of 2007, from which it realized revenue of $2.9 million and a GAAP loss of $303 thousand -- not a great foundation for a $100 million purchase.

Dictionary.com and its ancillary brands seem like a perfect fit for the company's strategy, though. The overriding question is the validity of this strategy. While the notion of driving people to a web site for one piece of info is so 2006, Answers Corp. seems like the perfect company to take advantage of widgets to extend its market presence, and the value of baseline domain names such as these should remain high.