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Demand Media Acquires $2M of InfoSearch Products
10/05/2006 - Demand Media Acquires $2M of InfoSearch ProductsMarina del Rey, California - ( Search Engine Optimization Inc ) - October 5, 2006 - Demand Media has agreed to purchase $2 million of InfoSearch Media's ContentLogic products and services over the next two years, in a multi-year content alliance. In addition, Demand Media will acquire all of the assets of Answerbag.com and will receive warrants to purchase 5 million shares of InfoSearch Media's common stock in exchange for $3 million in cash and the issuance to InfoSearch Media of warrants to purchase 125,000 shares of Demand Media Series C Preferred Stock. Demand Media also obtained the right to appoint one member to the Board of Directors of InfoSearch Media as part of the transaction. The companies, headed by former executives from Ask Jeeves and MySpace, also expect to enter into future collaborative arrangements to develop content products and services across Demand Media's domains.
George Lichter, President and CEO of InfoSearch Media explained, ''We are enthusiastic about this transaction and the opportunity for InfoSearch's unique content development capability to be leveraged by Demand Media's powerful reach. This transaction forges an alliance with a driving force in the media industry and strengthens our balance sheet. Importantly, the sale of Answerbag enables InfoSearch Media to focus our resources, reduce our expenses and build on our core competence of creating and leveraging content within the Internet marketing sector. We are confident we have now set the foundation for continued growth and stronger operating margins.''
Richard Rosenblatt, Chairman and CEO of Demand Media added, ''This alliance will help to expand our content offerings. With a growing portfolio of content web sites and over 8 million domains on our platform, we believe that InfoSearch will help us deploy high-quality content across multiple properties.''
The warrants to purchase InfoSearch Media common stock issued to Demand Media represents approximately 9.8% of InfoSearch Media's outstanding common stock and the warrants to purchase Demand Media preferred stock represent a nominal amount of the outstanding capital stock of Demand Media. The securities issued in connection with the transaction were issued in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended and may not be resold in the absence of an effective registration statement or an exemption from the registration requirements under the Securities Act.
InfoSearch Media provides content based services, through a network of professional writers, to assist businesses with implementing content-based solutions. InfoSearch Media products include ContentLogic and Web Properties (ArticleInsider).
The Demand Media proprietary media platform powers the company's domains and content verticals. The Company utilizes publishing, community and monetization tools to assist the next generation of new media companies. The privately held company was founded in May and is based in Santa Monica, CA, with offices in San Francisco and Seattle, WA.
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