MappingTheWeb //

In a seemingly low-key announcement, AOL yesterday acquired news search company Relegence. The news search engine is based in New York and focuses on financial news and information.

Exact financial terms of the deals were not disclosed, although reports indicate the deal was somewhere in the range of $55-65 million.

John Battelle’s blog (link above) describes Relegence as follows:

“Relegence, a subscription-based service, aims to deliver relevant information to users’ desktops as soon as it’s published, regardless of the medium used. The notification and delivery technology draws from such sources as local and international newswires, television and cable networks, regulatory filings, Internet bulletin boards and Web sites and is designed to be integrated with internal streaming content.”

Relegence was founded in 1999 and initially funded by 1980’s junk bond king Michael Milken. Customers of the company include large financial institutions such as Merrill-Lynch, Fidelity, and Credit-Suisse, as well as large financial newspapers such as Bloomberg and Reuters.

In my opinion, AOL does not have a very robust financial offering to begin. I think the acquisition is an attempt to improve the experience and add valuable financial data and news into the mix. Yahoo! Finance has done an extremely good job at creating a useful financial portal experience. AOL would like to capture some of this market share. Even Google wanted a piece of Yahoo’s pie when it launched the much-anticipated but disappointing Google Finance.

This latest AOL acquisition doesn’t seem to work for me for one specific reason. Previously, Relegence has been mainly focused on institutional/corporate clients (B2B). AOL is largely a consumer-facing brand (B2C). There is a lack of congruency with this fit. My guess is that AOL will continue to satisfy corporate customers, but move to a more consumer-friendly offering to drive traffic and increase user base.

I have never been a fan of AOL, nor its acquisition strategy. Nearly all take-overs have flopped, gone on to do nothing, or proved to be overvalued business models. Who really uses ICQ or Netscape?

But yet, I have hope. Well, not really.

Congrats to the Relegence team.