Insightful has off-loaded its InFact search and text analysis technology to focus on its core statistical and predictive data analytics software. The Seattle, Washington-based company said it had sold both the technology and IP rights of its InFact search engine to startup Hypertext Solutions for $3.65m in cash.
Hypertext, also based in Seattle, develops software that makes information on the Web more intelligent.
Insightful CEO Jeff Coombs said the move allows the company to focus 100% of its efforts on growing its core S-PLUS statistical analysis and Data Analysis product line, which he said grew 14% in the year to date.
A sell-off of Infact has been on the cards ever since Insightful integrated its Text Analysis (InFact) product more closely with its Data Analysis business at the start of this year. Effectively that meant it was not longer treating text analytics as a separate business segment. At the same time the company also announced that it does not expect any significant revenue from its InFact product line.
Coombs said that Insightful will continue to support its current InFact customers after it negotiated a support license from HyperText as part of the deal. But he added the company will not be licensing InFact to any new customers.
Also as part of the agreement Hypertext also gets several Insightful employees who were previously members of the InFact team.
The transaction closed yesterday, the same day the company reported its second-quarter results, with its net loss widening to $1.3m, from $0.4m a year ago on revenue up 7% at $5.2m. Software license revenue dipped to $1.2m in the quarter, from $2.2m a year ago. However, the company’s core Data Analysis returned growth of 22%.
InFact license revenue, as expected, was down to $100,000, compared to $300,000 in the same 2006 quarter.
Insightful expects to record a gain in its third-quarter from the acquisition calculated as the purchase price less the costs of closing the deal.