Inktomi Corp. (Nasdaq: INKT) said Thursday it will buy Ultraseek Corp., a subsidiary of Walt Disney Co.'s GO.com Internet division (NYSE:GO), for about $344 million.
The deal relieves GO.com of a business that didn't fit well with its content business, and gives Inktomi customizable search and navigation software for its corporate intranet and extranet sites.
Shares in Inktomi, a developer of infrastructure software, closed at 128 13/16 Wednesday, having declined since the company reported a surprise profit in its second quarter. Go.com, which was embroiled in a dispute with Goto.com (Nasdaq: GOTO). over their logo, saw shares close at 12 5/16.
Inktomi will buy all of Ultraseek's outstanding stock and assume all its stock options in exchange for $3.5 million in cash and $341.2 million worth of Inktomi stock. Of the total amount, $317.5 million will be given to Go.com, the company said in a statement. Inktomi will account for the transaction under the purchase method.
"Our move into the enterprise market sets the agenda for the delivery of search and navigation software for intranet and extranet sites. Ultraseek's proven technology and extensive customer base makes it an excellent fit for our organization,'' Inktomi CEO David Peterschmidt, said in a statement.
GO.com said the divestiture of the Ultraseek enterprise business is part of GO.com's plans to focus on its business of consumer entertainment, information and services. GO.com still has its consumer search technology, used for its properties such as the GO.com portal, ESPN.com and Disney.com.
The transaction is expected to close in the September quarter, after which Ultraseek will operate under the Inktomi name with all employees of Ultraseek joining Inktomi.