Answers.com, a leading Q&A site has today announced its agreement to be acquired by AFCV Holdings, LLC, a portfolio company of growth equity investor Summit Partners established in 2007. The deal is based on the total cash consideration of $127 million. Answers.com common shareholders will  also receive $10.50 in cash for each outstanding share of common stock they own. Additionally, Series A and B convertible preferred stock will also be provided cash consideration based on the number of common stock into which those shares are convertible at the time of the merger.

“This is a great outcome for our shareholders,” said Bob Rosenschein, Founder, Chairman and CEO. “After an exciting six years as a public company, we are very pleased to achieve considerable value for our investors. The acquisition price of $10.50 per share represents a significant cash premium of approximately 33% over our 90-day volume-weighted average closing stock price. This agreement is also a positive for our community members. The integrity and commitment of our company to our products remain unchanged, as we continue our mission of creating the ultimate destination for answers.”

So, with the acquisition of Answers.com, more attention will be routed to new sites like Quora and the mobile searcher ChaCha.

The BOD at Answers.com has also approved the merger and are expected to hold a special meeting for stockholders to vote on the merger agreement. The transaction is expected to complete in second quarter of 2011 under exclusive  financial advisory of UBS Investment Bank and legal advisory of Kramer, Levin, Naftalis & Frankel, LLC for Answers.com.

The search industry has become brutal, and many competitors have been struggling to keep up. Rival Ask.com has made a few changes recently, though it too has lost traction ever since Google took over the bulk of the market. To trek back to its Q&A roots, Ask.com launched a Jeeves beta feature that utilizes the human network. It has also adopted a new strategy for responding the needs of mobile users with the release of the free application Ask for iPhone. This new mobile app is the predecessor of the Ask Mobile GPS software.

Taking a look at other developments in search industry, Bing has seen an upswing with 108 percent growth in new visitors since last year. On the other hand, Ask.com experienced increasing visits up to 75.3 percent, MySpace with only 19.1 percent and MapQuest with 22.1 percent.