(photo credit: Courtesy)
The recent acquisition of Answers Corporation by AFCV Holdings was made at the right time for investors and will help the development of the company’s Q&A website Answers.com, Israeli-based CEO Bob Rosenschein said on Sunday.
AFCV, a portfolio company of Summit Partners, completed its acquisition of Answers Corp. on April 14 after a majority of the company’s shareholders approved the sale of $127 million, or $10.50 per share. Answers was delisted from the Nasdaq and turned into a private company immediately afterward.
Answers.com, which provides literally millions of answers to questions such as “Which animals are color blind?” and “If the statue of Lincoln in the Lincoln Memorial were standing, how tall would the figure be?”, is a top 20 US web property according to its comscore, with almost 59 million unique American visitors to the site in March, and around 90 million unique visitors per month worldwide.
American-born Rosenschein, who has lived in Israel since 1983 and who founded the Answers website in 1999 with eight veterans of Accent Software, a company which he founded, told The Jerusalem Post
that Answers Corp. agreed to the sale because it “felt this was a very good return for our public shareholders at this time.
“You have to realize that it was a 33 percent premium on the average 90- day trading price previous to the announcement,” Rosenschein said, adding that such an offer had to be considered seriously.
The deal, which was agreed upon in February, was challenged at the last minute when MySpace co-founder Brad Greenspan approached Answers on April 9 with an offer to purchase the company at a higher price than that offered by AFCV. However, Rosenschein said that the board of directors rejected the approach on the basis that it was not serious enough, and that Greenspan referred only to “verbal expressions of interest from investors” when explaining how he would fund his acquisition.
Following the last-minute offer, the board immediately delayed its shareholder meeting for two days to allow the market to absorb the development, Rosenschein said, only to receive another approach from Greenspan just hours before the second shareholder meeting, this time with an increased offer of $14 per share. The second approach was also rejected, Rosenschein said, adding, “Had he proposed $11.50 and it had been more solid we might have taken him more seriously.”
Rosenschein, an MIT Computer Science graduate with a lengthy background
in the industry that includes stints at American Management Systems and
the World Bank, said that the idea for Answers.com was first given to
him by renowned Israeli hitech entrepreneur Yossi Vardi, who became an
early angel investor in the company “and has supported the company
Since its establishment the website has grown into one of the most
popular Q&A websites on the Internet, and has adopted new ways of
finding users, such as mobile technology. Answers has been attracting
mobile traffic “for as long as there has been mobile traffic,”
Rosenschein said, adding that since launching mobile access via html
last year, the mobile sector has grown to account for just under 10% of
overall traffic and is expected to continue to grow in the future.
Rosenschein said that the company expected to launch its first
smartphone app later this year, and he also listed improving the quality
of answers, ease of use, performance and social media access as other
areas the company hopes to focus on now that the deal has been