In a rocky courtship that makes Oracle's (Nasdaq: ORCL ) prolonged hookup with PeopleSoft seem tame by comparison, Mamma.com (Nasdaq: MAMA ) is ready to give it another go with Copernic Technologies.
Thursday night, Mamma announced that it had finally closed on a deal to acquire Copernic for $15.9 million and 2.38 million shares of freshly minted Mamma.com stock. The two companies fit well together. Copernic provides Web tools (such as desktop search) for Internet users and online trackers for website publishers and webmasters. Mamma.com aims to attract both camps through its fledgling search engine.
Even though the companies were made for each other, the nuptials lasted a grueling 13 months. Mamma and Copernic announced in November 2004 that they were going to hook up, but then the Securities and Exchange Commission began an informal inquiry into Mamma's stock-trading activity two months later. The shares were coming off a wild run in 2004, fueled by having Mark Cuban as a passing investor.
Between the SEC investigation and Mamma's delayed financial filings, Copernic's cold feet were overcome with frostbite. In May, it terminated the merger's letter of intent. But three months later, after the dust clouds at Mamma had settled, Copernic and Mamma renewed their deal.
Things didn't get any easier, though. The deal was supposed to originally close by the end of the third quarter, and the companies ended up requesting extensions in September, November, and December as the respective deadlines lapsed.
Mamma.com is a metasearch engine. Just as with InfoSpace's (Nasdaq: INSP ) Metacrawler and CNET's (Nasdaq: CNET ) Search.com, a submission scours the leading portals and spits back the most relevant results. The approach works, even if most Internet users tend to go with a standalone search engine, like MSN.com or IAC/Interactive's (Nasdaq: IACI ) Ask.com. (CNET has beaten the market since being singled out in the Rule Breakers newsletter service this year, but the recommendation had more to do with CNET's content properties than with its relatively obscure metasearch business.)
Paid search has become a huge market, but it hasn't been as profitable as one would expect for the second-tier players like Mamma or contextual ad sellers such as MIVA (Nasdaq: MIVA ) and LookSmart (Nasdaq: LOOK ) . There is always the hope that as more sponsors earmark bigger chunks of their marketing budgets to interactive advertising, the goodness will trickle down to the smaller players like rice at a wedding.
As for that wedding, the cake is stale. The party guests have returned their gifts. The ring boy and flower girl have blossomed into adults and are making out over by the bowl of dried-up punch. But it doesn't matter. Mamma and Copernic are finally together.
So let's see how the future unfolds for these potentially promising players. The honeymoon was 13 months in the making, but the industry as a whole may take longer than that for investors to fall in love with.
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Longtime Fool contributor Rick Munarriz loves his mamma. He does not own shares in any of the companies mentioned in this story.
The Fool has a disclosure policy. He is also part of the
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