Monday, November 12, 2007

Yedda Means Knowledge (in Hebrew), And Knowledge Means Cash (for Yedda)

AOL completed another acquisition of an Israeli start up. It started in 1998, when ICQ was sold for $406M, continued a week ago with the Quigo M&A for $340M, and it is now the turn of Israel-based Yedda, a semantic Q&A platform that was sold for an undisclosed amount (estimates say it's in the double digit millions). According to the deal terms, Yedda will be a wholly owned subsidiary of AOL and It’s R&D office will remain in Israel.

With only 20 employees and an a seed investment of $2.5M (raised on March 2007, from Genesis Partners and angel investors), Yedda managed to succeed where Google failed. Yedda developed a semantic Q&A service that uses patent pending technology. The engine automatically matches user questions to other related questions and topics, while finding the best available users to answer the questions based on their profile data and previous activity. As a result, users can establish their status as 'experts' on a given topic.

According to the release from AOL, the acquisition was primarily focused on Yedda's patent pending technology and not its user base: Comscore shows a big jump in usage since the summer, from 215,000 unique users in June to nearly 800,000 last month. It's worth to mention that 90% of the traffic goes to Yedda through biz dev deals to power Q&A services on other sites. Their largest partners are ePals and TheJobNetwork (via).

Yedda-powered features and widgets are set to begin appearing on AOL's sites over the next few months - it will be interesting to see how AOL leverages this deal.Some of the existing widgets include the frequently asked question, Ask a question and My profile. See example:

Questions on Yedda range from practical to not-safe for work type of questions. For example: I'm searching for copy of 1968 Italian film, Colpo di Sole (1968). How should I look? or Who found Melinda England's racy MySpace pictures? How did this story make it to the headlines?

Yedda was founded in October of 2005 by CEO
Avichay Nissenbaum and CTO Yaniv Golan, who I met earlier this year in the Web 2.0 Expo in San Francisco.

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At 2:11 PM, Blogger Lisa Damast said...

Hi Eze,

Great coverage of the deal. According to the IVC website, the seed investment was in March 2007.


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