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GuruNet, Google get a little closer

Reference challenger's stock falls after it reveals the extent of its new content-sharing deal with the search king.

GuruNet's stock fell back to earth on Tuesday after the company revealed the extent of its tightening relationship with Google.

Since last month, Google has been gradually switching over its search term definition links to GuruNet's Answers.com site from Google's old standby, Dictionary.com. In a conference call with reporters Tuesday morning, GuruNet CEO Robert Rosenschein said Google's transition to Answers.com was complete.

"It now appears we're getting all of that traffic and Dictionary.com is getting none," Rosenschein said.

Dictionary.com is owned and operated by Lexico Publishing Group, a privately held company in Los Angeles. Lexico issued Google a free, nonexclusive license to link to its dictionary definitions in April 2000.

"We're disappointed that we are no longer in their definition link," said Lexico CEO Brian Kariger. "But we continue to work with Google in other areas and look forward to exploring future opportunities in our relationship. Google powers our Web search on Reference.com, and we run AdSense in our network mix."

Google could not immediately be reached for comment.

Investors had run up GuruNet's stock as high as $26 from the mid-teens a week earlier as reports of a closer Google relationship circulated. On Tuesday, they were apparently disappointed by the extent of the relationship as described in the call, and sent the stock down more than 22 percent in midday trading.

In an interview after the call, a GuruNet spokesman described the relationship with Google as "informal," but said the company planned to strengthen ties by implementing Google AdWords, the search giant's system for distributing contextual text ads and sharing the revenue they generate.

"We're going to be adding more symbiotic elements that will keep this particular relationship going," said company spokesman Jay Bailey.

The reference site also intends to offer Google searching within its Answers.com pages, rather than simply providing links that take searchers off its site.

GuruNet said the handover from Dictionary.com resulted in a significant increase in traffic on Answers.com, and that non-Google traffic is keeping pace with that growth.

GuruNet assembles a wide array of reference sources for more than a million keywords. A search on "social security," for example, turns up a dictionary definition from the American Heritage Dictionary, an encyclopedia entry from the Columbia Electronic Encyclopedia, and more entries from other sources.

The results page serves up paid contextual links on the right side and links to further information--many pointing to Google sites--on the left.

GuruNet also offers a downloadable application that makes any term in any document searchable by clicking on it while pressing the Alt key.

Since just before its initial public offering in October, GuruNet has supplied reference results for Amazon.com's A9 search engine. In Tuesday's call, Rosenschein said his company is working with the online retailer to increase advertising on those pages.

GuruNet this week issued a regulatory filing to disclose the sale of $12.6 million in stock warrants. In the conference call, Rosenschein refuted recent press reports that the company was in debt.