Search provider FindWhat.com announced on Wednesday plans to acquire Miva, a provider of online storefronts and other e-commerce functions, in a bid to buff up its offerings for small businesses.
FindWhat agreed to pay privately held Miva's shareholders $2.7 million in cash and $2.7 million in stock, also assuming about $2.5 million in notes and liabilities. Miva offers small businesses the opportunities to improve their e-commerce capabilities through its Miva Merchant storefront product.
The deal is subject to approval by both companies' boards of directors. Miva would operate as a division of FindWhat, maintaining its offices in San Diego and top management. The deal is expected to close by the end of the year.
The purchase represents a commitment by FindWhat to strengthening its position among the small businesses that were the early adopters of paid search. As a second-tier paid search provider behind Google and Overture Services, FindWhat built a thriving business in appealing to more cost-conscious advertisers by striking distribution deals with smaller search partners, such as Dogpile and Excite.
However, the Fort Myers, Fla., company recently reported that its advertiser base declined last quarter for the first time in two years, ending the quarter with 900 fewer accounts. FindWhat CEO Craig Pisaris-Henderson said most of the lost accounts were small advertisers who spent very little, as FindWhat concentrated on increasing the amount its advertisers spent. He pointed out that the average advertiser's account rose to $715 in the quarter.
In April, FindWhat decided to up its minimum to bid to a nickle in an attempt to up its average price per click. The company has also created an agency sales team to concentrate on getting larger accounts.
Together with Miva, FindWhat.com would offer a more complete, comprehensive business solution to small- to medium-sized businesses. Businesses that can utilize Miva Merchant software to create fully operational online storefronts with shopping cart capability and can purchase other complementary e-commerce services through Miva's additional plug-ins and modules. Through FindWhat.com, online marketers are able to cost-effectively promote their websites and find highly qualified prospects who have already expressed an interest in their product or service. In a statement accompanying the announcement of the Miva deal, Pisaris-Henderson reaffirmed FindWhat's commitment to the small advertiser.
"FindWhat is focused on the needs of the small-to medium-sized business," he said. "This is a first step toward our goal of expanding our capabilities so that we can help online merchants find, get and keep customers."
Miva will bring to FindWhat 70,000 registered users of Miva Merchant. It has 1,100 distribution partners. The company will not, however, bring profits: Miva said it lost $400,000 in the first six months of the year on $1 million of revenue.
FindWhat greatly expanded its international reach in June, when it inked a $163 million deal to acquire European paid search company Espotting. The deal is expected to close in the fourth quarter.
Adapted from internetnews.com.