Copernic to Mamma.com: Never Mind

After agreeing in November to be acquired by search player Mamma.com, desktop search company Copernic Technologies is calling it off, citing a Securities and Exchange Commission (SEC) investigation into the public company.

While the SEC has been informally investigating Mamma.com for some time, Copernic’s decision was apparently precipitated by the firm’s Tuesday announcement that the inquiry had been formalized. The SEC is looking into trading in the company’s securities, its financial reporting and internal controls. Mamma.com’s stock has a history of volatility, having tripled in a single day in March 2004.

Despite all of its troubles, Mamma.com maintains it doesn’t see any reason why the Copernic acquisition shouldn’t have gone through. It had expected to close the deal before the end of May and is now considering whether it’s due any break-up fees.

Mamma.com runs a meta-search engine, a paid search listings network and a pay-per-click ad network. Copernic, which offers an ad-supported version of its desktop search tool, would have added that technology and distribution network to the firm. It also would have brought Mamma an alliance with America Online.

AOL began offering users a beta version of Copernic-powered desktop search in December 2004, officially announcing a license deal in January 2005. The two companies said they’d cooperate to incorporate Copernic desktop search technology in AOL Search so users could search for information online or in files on the hard drive with one application. Neither company has indicated that the deal is off.

Susan Kuchinskas of internetnews.com contributed to the reporting of this story.