Answers Corp. (NASDAQ: ANSW) stock got smashed on Friday, dropping more than 23%. The company that via Answers.com provides users with answer-based search services and also operates Wikianswers.com, which is a Q&A platform where users ask various questions and a community of people answers them, is having all kinds of problems trying to finance an acquisition of Lexico, owner of the Web properties Dictionary.com, Thesaurus.com, and Reference.com.

Answers planned to buy the company for $100 million, even though Answers had just $9.2 million in cash at the time of the announcement. Skeptics, like my IOI partner, Zack Miller, just looked at the numbers and wondered how this deal was going to be financed, and it appears that they were correct to be skeptical. Since the announcement back in July, Answers stock is down over 65%.

In a note on Friday, paidContent.org referring to the deal financing said, "a plan to sell 14.94 million shares, raising $100 million. But that was based on the company's Tuesday closing price of $6.69. Since then the stock has been crushed, falling nearly 42 percent to $3.96. At this level, 14.94 million shares would only be worth $58 million, not nearly what it needs to raise to fund the buy. At these prices, the company would have to up the offering to 25.6 million, further diluting the value held by the company's current shareholders."

It looks like if this deal gets done, and I have my doubts that it will, investors are going to see lots more red, as the stock looks like it will be heading much lower.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position long or short in any stock mentioned as of 1/20/08.

I just read an interesting report from the Pew Internet & American Life Project. Part of the report stated the obvious: Americans are turning to the web more and more to get answers to all of life's problems. After polling more than 2,790 adults, ages 18 and older, the report found that 58% of Americans that have dealt with issues surrounding things like health, taxes, school, etc. used the Internet to seek help. Pretty expected.

What I thought was actually pretty interesting was a description of Gen Y, those young Americans aged 18-30, and their habits.

It turns out that "Generation Y was most likely to use libraries to get problem-solving information and for general purposes. In their lives, libraries are not losing value. In fact, 40% of Generation Y respondents said they would use libraries in the future to seek information, compared with 20% of those age 30 and older."

As Middle East leaders prepare to convene together, again, I was looking for some ways to play this event in my portfolio via Israeli Ingenuity, something we discuss a lot at IsraelNewsletter.com. This time around, the location is Annapolis, Maryland, site of the U.S. Naval Academy. Tuesday's conference aims to relaunch Israeli-Palestinian peace talks for the first time in seven years. Looks like almost everyone is going to attend. Even Lebanon looks ready to join the U.S., Israel, the Palestinians, and Syria in making history.

I'd be a buyer here of Elbit Systems (NASDAQ: ESLT), an Israeli defense contractor working on some large deals and really cool technology. BloggingStocks' Aaron Katsman wrote this past week about the anti-hijacking technology Elbit is marketing and this will certainly come in handy in Annapolis while each attending party will be working diligently to secure its best interest at the expense of all the others'. We've been here before and most of us do not so readily imbibe the peace kool-aid as in years past.

The second company I'd be buying here is Answers.com (NASDAQ: ANSW). Answers.com is an Israeli internet firm that runs an answer-based information portal providing users with answers covering millions of topics. I hope the participants in Annapolis are using Answers.com to find a path to peace because from where I'm sitting, it doesn't look particularly promising.

Answers.com, which gets a lot of its traffic from search monolith, Google (NASDAQ: GOOG), is in the process of acquiring the parent company of Dictionary.com, in a bid to secure more organic search traffic to its site. Dictionary.com may come in handy for Annapolis participants to find the definition of "disappointment" when this is all over.

Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC., the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author's fund holds a position in ESLT but not in ANSW.

Answers Corporation (NASDAQ: ANSW), parent of Answers.com, a Web 2.0 amalgamation of useful research info, announced yesterday that its newish service, WikiAnswers surpassed one million questions posted on its site. I don't know whether one million is a lot, but it's right up there with what my five children ask me in just a single day.

The service allows content to be generated completely by users. The Holy Grail of Web 2.0, User Generated Content (UGC), this type of service allows users to both post questions and answer others' questions in a wide variety of domains. Growth has been impressive. According to the company, for the first nine months of this year, WikiAnswers' unique monthly visitor count in the U.S. has grown 317%, to more than four million. This ranks WikiAnswers as the second-fastest growing domain of the top 1,500. Not too shabby.

Google (NASDAQ: GOOG) pulled a competing service last year after boring results. Yahoo! (NASDAQ: YHOO), on the other hand, with Yahoo! Answers, has proven the model that users enjoy using this type of service. Yahoo has seen tremendous growth and according to TechCrunch, "one of Yahoo's most successful product launches in recent years has been Yahoo! Answers, which is showing more than 50% year-over-year growth in pageviews, according to comScore. Yahoo! keeps pushing the crowd-sourcing property, which lets 95 million registered members around the world answer each others' questions."

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.

From time to time, I go to Wikipedia to check out some words and concepts. It seems that everything is embedded in the site.

But, I always double-check things. For example, a good source for this is Answers.com, which licenses its content from well-established content sources.

As for Wikipedia, the worldwide community has the power to make contributions. It's a powerful idea – but certainly subject to risks.

Well, according to a recent report from the AP, Wikipedia is now dealing with the problem. You see, a 24-year-old Wikipedian contributor said he was a professor of theology.

However, after some investigation, it was learned that he was actually a college drop-out.

So, now Wikipedia has a new rule. That is, if someone makes a claim about his or her credentials, there must be verification.

That certainly makes sense to me – and should help with the credibility of the site.

But, despite this, I'm still going to double-check things.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.