Answers.com no longer has all the answers

Answers.com, one of Jerusalem’s largest employers of English-speaking immigrants and a long-time survivor of the first dot.com crash, has been effectively gutted by its new owners. TechCrunch reported that yesterday, 45 of the company’s 65 Israel-based employees were fired, along …

Answers.com with former CEO Bob Rosenschein

Answers.com, one of Jerusalem’s largest employers of English-speaking immigrants and a long-time survivor of the first dot.com crash, has been effectively gutted by its new owners. TechCrunch reported that yesterday, 45 of the company’s 65 Israel-based employees were fired, along with some of the New York staff (the company had a total of about 90 people). The axed included Answers.com’s founder and CEO Bob Rosenschein and CTO Jeff Schneiderman.

The bloodshed was not entirely unexpected (new owners tend to look at their acquisitions with more scrutiny than, perhaps, the founders with all their history and attachment). But that doesn’t make it any less painful for the staff let go.

The purchase of Answers.com always seemed a bit strange to me. Publicly traded on NASDAQ, the company was profitable and seemingly happily humming along when AFCV Holdings, a portfolio company of growth equity investor Summit Partners, swooped in to acquire Answers.com for $127 million.

That may seem large but, when the deal was announced, shareholders were unhappy, claiming that it tremendously undervalued Answers.com. They even tried to block the sale (a U.S. court denied the motion in April 2011).

AFCV said the layoffs were necessary to focus the company on its main product –the Q&A site WikiAnswers – and that a number of product initiatives (including 1-Click Answers, AnswerTips and Widget Gallery), as well as a mobile version, would no longer be supported. AFCV also said that, since Answers.com was not public anymore, the company didn’t need certain support structure.

All that makes sense, and it was probably no surprise to Rosenschein and Schneiderman that AFCV would want to consolidate management at their own headquarters or with their own people (hastening the duo’s departure). And it may even make a certain amount of business logic – as Gil Reich, the head of Answers.com’s product management, pointed out in his own blog, Answers.com went through so many ups and downs in its 12-year tenure, that the new owners may have felt compelled to “ruthlessly cut everything it felt distracted from (the company’s) core mission of a great community creating great content.”

But it’s nevertheless frustrating to see a company that employed a lot of good people in Israel lose that staff to a new American parent that clearly doesn’t share the same sense of “career Zionism.” The Business Insider blog described it more nefariously: It looks like the new owners are “milking the company for the cash that comes from all that SEO traffic.”

One of my friends at Answers.com wrote on her Facebook status, it’s the “end of an era, beginning of a new one?” We’ll have to wait and see. There are still 20 people left in Israel at Answers.com. For the rest, that new beginning may not be exactly what they expected.

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About Brian Blum

Brian has been a journalist and high-tech entrepreneur for over 20 years. He combines this expertise for ISRAEL21c and Israelity as he writes about hot new local startups, pharmaceutical advances, scientific discoveries, culture, the arts and daily life in Israel. He loves hiking the country with his family (and blogging about it). Originally from California, he lives in Jerusalem with his wife and three children.