Ask Jeeves Inc. to Be Bought for $2 Billion

New York Times ^ | March 21, 2005 | GERALDINE FABRIKANT

[nickcarraway]

AC/InterActiveCorp, the Internet company headed by Barry Diller, is close to an agreement to acquire Ask Jeeves Inc., the nation's fourth-largest search engine company, for about $1.9 billion, according to an executive involved in the negotiations.

An announcement could be made as early as today.

IAC/InterActive owns a variety of Internet businesses. Its principle holdings are Expedia, Ticketmaster, Home Shopping Network, Match.com and CitySearch. Advertising spending on search sites is rapidly growing and Mr. Diller's company appears to be trying to tap into a market dominated by Google and Yahoo.

Most of Ask Jeeves's revenue comes from advertising that appears on its sites through a contract with Google. That contract runs through 2007.

Fourth-quarter profits and revenue at Ask Jeeves, whose brands include ask.com, Excite.com, iWon.com, more than doubled. Net income rose to $17.5 million and revenue rose to $86.1 million from $31.8 million a year earlier.

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IAC/InterActive has 44 million visitors a month to its various sites. CitySearch, one of its holdings, is a network of city guides that provide information on restaurants, bars and events in different cities. By marrying a local-search business with a global search engine, Interactive hopes to benefit from further growth in targeted keyword advertising, the executive involved in the deal said.

As an example, CitySearch customers can specify a certain kind of restaurant, and choose from a list of neighborhoods in the city they have chosen.

IAC/InterActive is expected to acquire Ask Jeeves in a stock transaction, exchanging shares in IAC/InterActive for shares in Ask Jeeves, then buying 60 percent of the just-issued IAC/InterActive shares back for about $1.2 billion.

Ask Jeeves closed Friday at $24.24 a share, and IAC closed at $22.29. The bankers in the deal are J.P. Morgan, Allen & Company and Citibank. Ask Jeeves bills itself as an English-language friendly Web site that encourages users to formulate searches in question form.

[GretchenM]

fyi

[dennisw]

Has anyone here ever used "ask Jeeves"? I think I used it once a few years back.

[ambrose]

Maybe twice for me.


Of course, they aren't paying 1.9 billion in cash. Just handing over some Monopoly money stock certificates.

[Pro-Bush]

Outrageous, it can't be worth that much.

[ChadGore]

Irrational Exuberance.

[dennisw]

Ask Jeeves was bought for 1.9 billion in Barry Diller funny money.... gotcha! :)

[dennisw]

Outrageous, it can't be worth that much.

No cash is being spent to buy it. It's being purchased with Diller dollars which are also redeemable at all Disney gay days.

[Selkie]

April Fools came 10 days early.

I didnt even know ask jeeves was still around.

Gee I guess I went down the wrong career track.

I'll just go put together a search engine with a cutesy name and sit back a few years.

[Pro-Bush]

I can always count on you for a laugh. Thank you!

[dennisw]

thx :)

[gentlestrength]

It was my first. Search engine. I loved it. Until I discovered Google, and never used it again. I'm shocked it's selling. Is the info on its search engine that different? I purposely said "don't invest in it" in my imaginary stock trading. And I purposely said yes to Google. Too bad it was imaginary money.

[Northern Alliance]

I don't understand why any of these search engines including Google is worth billions. They seem to have almost no advertising, particularly Google, which I suppose is one reason it became so popular, and what I do see there to be from very small companies that could not possibly have a very big advertising budget. Where do they make their money?

[Rebelbase]

"It was my first. Search engine. I loved it. Until I discovered Google, and never used it again"

Bump.

[Rebelbase]

"Where do they make their money?

There are advertisements on every google page you pull up. Look to the right side of the screen and you'll see a list of "sponsored links". These are paid ads that show up as if they were legit search links.

Also, the top of each page sometimes has a prime positioned result from your search that is a paid spot.

Google also sells its database and advanced search features to industry as well as servers to manage the data.

[PBRSTREETGANG]

Yikes, I'd better scrape up a billion quickly to buy MySimon.com before someone else snatches it up!

[InvisibleChurch]

how much will Jim Robinson sell Free Republic for?

[GOP_Proud]

< Has anyone here ever used "ask Jeeves"? I think I used it once a few years back. >

Same for me. I seem to remember not getting it to respond too well. Never went back. Why, when there's so many engines so much better?

[Northern Alliance]

Yes, I know there are sponsored links - many for really low budget, obscure things with small markets.

For example, I saw some of those links for software to retrieve POP3 email into Microsoft Exchange. That typically sells for a few hundred dollars or less and obviously is not a mass-market commodity. The advertisers could not be paying big bucks for those ads. Even given the large potential number of those links and the other sources of income you mentioned, I am surprised there is enough money coming in to put the price in the billions.

[Clock King]

More fast-talking shysters making a quick buck. AskJeeves is not worth $2E9 by a long shot. Either the article is bogus or there are greedy people out there.