GRU rockets 25% on news of... what?

| About: Answers Corporation (ANSW)

GuruNet (ticker: GRU), provider of the search service, issued a press release today announcing that it has become a Google search affiliate. Details and a comment:

GuruNet's press release said:

GuruNet Corporation (AMEX: GRU) a leading provider of integrated online reference information, announced today that it has signed an agreement with Google Inc. to include Google's contextual AdSense advertising on its information pages, as well as the integration of Google search into its product.

"Our revenue stream is based on including advertising alongside the million topics in our library," explained Bob Rosenschein, CEO of GuruNet. "We are pleased to be working with the industry leader and leveraging their broad ad inventory and strong technology."

As a result of the agreement, when's visitors require information beyond the site's selected reference content, now offers a co-branded, integrated and monetized version of Google's search functionality, allowing users to remain in one place for more of their information needs.

Quick comments:

  • Becoming an affiliate for Google search is smart. It means that now has a second shot at making money from users even when they don't find the content or ads that answer their initial queries.
  • Investors must have expected GuruNet to monetize its traffic with keyword ads, and it was most likely that they would have been provided by Google. Google supplies keyword ads to Ask Jeeves, AOL, and shopping search engine
  • Given that there's little surprising or incrementally positive in this press release, how come GRU stock is up over 25% off the "news"? Signs of pure momentum buying???

GRU chart below