Ask.com will announce Monday the acquisition of nRelate, an early-stage content discovery company, to further its content marketing and recommendations strategy. The deal lays the foundation for new search-based monetization tools for publishers.
The companies did not disclose the financial terms.
The move sends Ask.com on a path to support the ability to create and share. Most loyal visitors to Ask.com's site not only ask and answer questions, but read and share related articles and content.
nRelate's business model suggests content that complements what site visitors read -- not in the form of text links, but images in boxes at the end of the article linking to other content. One of the boxes could serve a paid advertisement, identified with an image and lowercase "i" in the right bottom corner, for companies like HGTV. The recommendation becomes automated, based on content on the site.
nRelate will become an Ask.com division, headquartered in its New York offices. It will remain a separate product line. Today, a handful of employees support about 35,000 sites that publish content related to parenting, DIY, food and more.
Ask's technology will integrate into nRelate's product, said Doug Leeds, Ask.com CEO, explaining how content discovery will become the next frontier in finding information. Search came first, followed by social integration. Now the site will recommend the next destination, even if that means taking the visitor to a related publisher's site or sponsor's brand page.
"Search was the original method to determine what to see next and how to find the information, but social has become a way to recommend content," Leeds said. "We think content discovery automation on the publisher's Web site will become much bigger."
More than 150 publishers sign up daily, supporting nRelate's 15% growth each month for the past year. The widget gets about a 6% click-through rate, compared with display ads that on average generate .09% CTR.
"We're approaching 1 billion impressions of our widget per month," said Neil Mody, nRelate CEO, who will remain with the company. "We expect to grow to stratospheric proportions to serve the entire spectrum of publishing, from the big brand names to the bloggers."
Heather Mann, founder of Dollar Store Crafts, publishes five do-it-yourself Web sites, using nRelate on all. Since implementing the technology about a year ago, she has seen click-through rates rise between 8% and 10%."It's a good way to introduce other content to readers, and I don't feel like I'm blasting my readers with unrelated content and advertising," she said.
Brands have begun to create content to distribute their message through widgets. Ask wants to distribute content to the more than 65 million unique U.S. monthly visitors to the Q&A site. Venture capitalists and companies in aggregate have made more than $200 million in investments in this space during the last few months.
Ask.com's parent company InterActiveCorp reported first-quarter 2012 revenue of $640.6 million, compared with analyst's expectation of $592.9 million. Based on reported earnings, Piper Jaffray analysts raised fiscal-year 2012 and 2013 revenue estimates by 6% each.
In May, Piper Jaffray Analyst Gene Munster wrote in a published report: "On search, the company expects flattish q/q top line growth through the rest of the year. We believe this may have caused some confusion from investors, but in terms of our expectations, the guidance suggests around 40% y/y growth in Q2 and around 30% in Q3, both higher than our expectations of in the 15-20% range."