WhitePages.com To Buy Snapvine for Around $20 Million

Seattle based WhitePages.com, a people search and background information site founded in 1997 by Alex Algard, will announce their pending acquisition of VoIP and widget startup Snapvine later today. The acquisition price is not being disclosed, but is rumored to be around $20 million, all cash.

This deal with SnapVine comes after WhitePages walked away from a Jangl acquisition (a competitor to Snapvine) last month.

So what is a people search company going to do with a VoIP/widget startup?

Algard says they want to make the fast growing WhitePages more relevant to users, and Snapvine can help them do that. Today the company is a phone and people directory that people use, ultimately, to connect to others that they’ve lost touch with. Today WhitePages includes publicly available phone numbers for most of the 180 million people in their database – about 80% of the adult U.S. population.

They’ll integrate Snapvine into search results, letting people claim their information and replace their phone number with a voicemail box from Snapvine, and/or a click-to-call button that lets people call them without giving out their phone number. Their hope is that as people do searches on themselves (about half of U.S. adults do this) and find their information listed on WhitePages.com, they’ll claim the profile and add Snapvine functionality.

Eventually Algard says they’ll integrate additional information into search results as well, such as social network links. Look out, Wink, Spock, etc.

That may or may not be a strategy that will work, but WhitePages has the resources to give it a try. The company was founded in Algard’s Stanford dorm room when he purchased the domain name for just $900 in 1996. The company has since grown to over $70 million in annual revenue and is rumored to be very profitable. In 2005 the company raised a whopping $45 million round of financing as well, adding to their war chest.

This $20 million deal isn’t the outcome Snapvine and it’s investors were looking for. The company has raised $12 million in funding, and the last round, just eight months ago, was rumored to value the company at $50 million or more. And while the Snapvine widget is still extremely popular on MySpace and other social networks, their traffic trends suggest the company is going nowhere fast. This deal, at least, returns capital to investors and lets the technology live on.

Look for a possible 2009 IPO for WhitePages based on the strength of their financials. Perhaps if Intelius, a competitor, gets called on their questionable revenue growth, WhitePages will take its place in the IPO queue.