Just when you figured that it couldn't get any worse for Mamma.com (NASDAQ:MAMA), with its stock trading for a third of what it was fetching a year ago, another delay has held up Mamma's plans to acquire Copernic Technologies.
The deal was supposed to have closed by today, but Copernic is asking for a six-day extension to complete its due diligence. It's not the first time that the company has had cold feet. If you think that Copernic may be the fiscal equivalent of runaway bride Jennifer Wilbanks, you're getting warm.
Copernic and Mamma first announced their merger in November. No, not this November. I'm talking about November of 2004. Two months later, Mamma announced that the SEC had begun an informal inquiry into its stock trading activity. After the investigation started to heat up and Mamma's financial filings for 2004 were delayed, Copernic got nervous. It bolted in May, terminating the letter of intent.
However, old flames die hard. Three months later, Copernic and Mamma agreed to give it another shot, looking to close the deal by the end of the third quarter. When September was coming to a close, Mamma announced that the deadline was being extended through the end of November. That brings us to the six-day holdup for the pending nuptials.
Mamma can certainly use Copernic. Mamma is a metasearch engine. Like InfoSpace's (NASDAQ:INSP) Metacrawler and CNET's (NASDAQ:CNET) Search.com, Mamma delivers search engine results after scouring through the content of the more popular portals. It works. Really. Copernic provides Web tools like desktop search and online trackers. If you've been following what the search heavies have been doing in these areas, you can understand why Mamma feels that it's important to have a software presence to keep pace in this rapidly expanding space.
Small search players like MIVA (NASDAQ:MIVA) and LookSmart (NASDAQ:LOOK) have taken different paths to stand out -- either through innovative services or building vertical content sites to feed ads into -- but buying a small software player like Copernic would give Mamma access to an online audience that may have never even heard of the self-proclaimed "mother of all search engines."
Are there investing ideas to be had here? It's pretty risky low-priced terrain here, and Mamma is far too small at the moment to pique the interest of the Rule Breakers team. On the other hand, CNET, with its $2 billion in market cap, was recommended in the Rule Breakers newsletter service earlier this year. But there is a lot more to CNET than just Search.com. However, the need to differentiate their offerings has forced these companies into innovative ways to draw traffic. Who knows if the next breakthrough in monetizing search will come not from the likely titans, but one of these small fellows -- with or without a software company in tow.
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 Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
