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Goto.com to buy Cadabra for $250 million

GoTo.com (Nasdaq: GOTO) plans to buy a comparison-shopping engine for $250 million.

On Monday, Goto.com announced a deal to buy privately-held Cadabra Inc. for $8 million cash and $242 million in stock, or almost 2.36 million shares at Monday's closing price. Goto.com had a market cap of about $.8 billion as of Monday's close.

Cadabra's product search and comparison technology will be integrated into Goto.com's website, which features a search engine in which clients pay for higher rankings in search listings.

"Cadabra is a logical evolution for our search marketplace," Goto.com CEO Jeffrey Brewer said. "Together we will be able to provide a more comprehensive and more valuable matching of buyers and sellers within our targeted, pay-for-performance model."

Executives from both companies portrayed the combination as a way for advertisers to improve customer targeting, and for shoppers to obtain better results from Web searches.

Shares of Goto.com shot up earlier this month after a federal court issued an injunction barring Go Network (NYSE: GO) from using a logo similar to Goto.com's, but the latter's stock fell last week after a subsequent ruling that stayed the injunction pending an appeal. Goto.com closed Monday at 106 1/8, down 2 1/8.>