US company Inktomi (Nasdaq:INKT) acquired start-up Quiver for $12 million in cash and shares last Wednesday. Inktomi provides information retrieval solutions.
Quiver, founded in 1998 by VP engineering Avi Segal and CTO Ofer Mendelevitch, originally developed a search engine based on sites' popularity according to users' bookmarks. In late 2000, the company replaced its business model and began developing Internet management and content cataloguing software.
Quiver has raised over $22 million to date. The last financing round was held in March 2002. Participants included El Dorado Ventures, Hummer Winblad Venture Partners (which originally invested in the seed funding round in September 1999), London Merchant Securities and Partech International, which invested $5 million.
Other investors include Weiss, Peck & Greer (now Lightspeed Venture Partners), Baron Capital Management, Staenberg Private Capital, Weber Capital Management and private investors, such as former Columbia Studios and 20th Century Fox CEO Alan Hirschfield, Garage.com VP venture finance Gideon Marks, Guy Gamzu, and Algorithmic Research founders Amos Fiat and Yossi Tulpan.
Quiver's development center was located in Ramat Gan until a few months ago, but the company confirmed that it is no longer active. Quiver's headquarters is in San Mateo, California. About 20 company employees will transfer to Inktomi.
The acquisition of Quiver is another sign of the consolidation in the data mining and knowledge management sector, especially of companies whose original business models were intended to compete against leading search engines such as Yahoo! (Nasdaq:YHOO) and Google. The basic technology of latter companies' search engines were first installed in the Internet, but later was developed for use with organizations' databases.
SPSS (Nasdaq:SPSS) acquired Lexiquest last February; Semio acquired Kalepa Networks; while Microsoft (Nasdaq:MSFT), Oracle (Nasdaq:ORCL), IBM (NYSE:IBM) acquired several small companies for relatively small sums.
Inktomi announced the acquisition together with its quarterly results. The company also announced that it was abandoning the high-speed surfing field, where it was competing against companies such as Akamai Technologies (Nasdaq:AKAM), and would focus on developing and marketing search products only. F5 Networks (Nasdaq:FFIV) made a similar move earlier.
Inktomi, traded at a market value of $120 million (a fraction of its peak value of $25 billion two years ago), reported a $235 million loss in the previous quarter ($1.62 per share) on revenue of only $23 million. The company also announced it was cutting it staff by 40%, leaving only 370 employees, compared with 1,300 in its heyday.
Published by Globes [online] - www.globes.co.il - on July 21, 2002