Enterprise search software developer Fast Search & Transfer ASA has bought out its joint venture partners in London-based Platefood Ltd, to bulk up its product portfolio with search-based monetization technology.
Fast is to pay 8.1m euros ($10.6m) for the 19.9% stake in Platefood held by Schibsted SOK AS (a subsidiary of European media company Schibsted AS) and the 61.01% stake held by Sensis Pty Ltd (the Australian directories service provider and a unit of Australian carrier Telstra Corp). Fast already held a 19.99% stake in Platefood, and the cash deal is to be financed from Fast’s 256m euros ($337m) cash reserves.
Platefood offers online search services and search-based advertising products, mostly to media and online directories companies. Platefood Performance is a search monetization and advertising system for selling, managing, and delivering pay-for-performance advertising. It also provides a global web index that offers best-of-the-web search results, and professional services to help customers set it up.
Online advertising is already a $18bn global market, representing 4.6% of total worldwide advertising spend, said John M Lervik, CEO of Fast. We have seen strong growth in the media, entertainment and telecom markets, and with the Platefood search-based monetization solutions, Fast will help customers monetize their content in new and innovative ways and protect ad revenues to effectively compete with content aggregators like Google.
The Platefood acquisition is a step forward in our ongoing growth strategy, said chief financial officer Joseph Lacson. We expect that through 2010, search-based monetization and advertising solutions will be one our fastest growing market segments.
Speaking to Computer Business Review, Lacson took the opportunity to dismiss claims that the acquisition would allow the Oslo, Norway-based company to take on its fierce rival, Autonomy Corp Plc.
We don’t compete against Autonomy all the time, said Lacson. The main difference between us and them is that we are growing and they are not. They had to acquire their biggest competitor in order to continue growing, he added, referring to Autonomy’s $500m acquisition of its larger rival Verity Inc in November last year.
In October, Fast said that for the third quarter ended September 30, it had posted a net loss of $4.5m compared to a year-ago profit of $1.7m. The net loss was mostly attributable to the impact of an income tax expense of $2.2m. Sales rose a healthy 60% to $42.5m from $26.6m a year earlier, thanks to new and additional license sales during the quarter.
On the other hand, for the same period UK-based Autonomy posted a net profit of $8.9m, up from $2.9m. Sales rose 137% to $60.2m from $25.4m in the previous year. Autonomy said at that time that sales were positively impacted by a combination of strong organic growth and the acquisition of Verity in the fourth quarter 2005.