The deal includes an initial batch of 250 million Optum shares plus an incentive agreement for Ansearch to drive for growth in unique visitors and to build revenue from online advertising from its search engine. Under the terms of the deal, Ansearch will receive a further three tranches of shares totalling 550 million Optum shares providing the search engine hits three performance milestones - 200,000, 400,000 and 600,000 unique visitors (eyeballs) per month.
Ansearch predicts it can reach half a million eyeballs a month in the first six months of launching its new search engine, which would enable it to compete against the likes of Sensis, Google and Yahoo for a stake in the Australian search and directories market.
The Australian search engine market is estimated to be currently worth $300 million per year with an upward trend. For Optum, the acquisition would appear at first glance to outside observers to be a strange one, given that is listed as a healthcare services provider and recently diversified into water recycling technology.
However, chairman Peter Jermyn the Ansearch purchase, although not finalised, is in keeping with its origins as a software company. "Our e-health product was software, so the deviation was the water acquisition," he said. "If we acquire Ansearch, then we become a multi-project company. It's a matter of looking for good projects wherever they are. We're impressed with growth potential of Ansearch. It's an exciting project with significant upside."
Dean Jones, the CEO of Ansearch, which operates the number 20 ranked search engine in Australia, MySearch, believes the end game in search will be fought on quality/quantity of data, not just it's organisation. He said, "To this end Ansearch, once launched, will focus on providing a relatively small database of websites (not pages) with an almost spam proof ranking algorithm. We will officially launch our new search engine under the Ansearch brand in late November 2004."