Barry Diller cites "a great opportunity to improve the consumer experience."
InterActiveCorp (IAC) plans to further cut the number of paid search links appearing in Ask Jeeves' search results, the company announced during its Q2 earnings call yesterday.
"It was very clear when we began our talks with Ask that there was a great opportunity to improve the consumer experience," said Barry Diller, IAC's chairman and CEO.
Beginning today, the number of paid links shown alongside search results will be reduced across all categories. The move is a continuation of an initiative begun last year to improve the engine's user experience, bringing organic search results to the spotlight. In April, Ask Jeeves implemented a 31 percent reduction of paid ads above the fold, which the company said increased user retention and frequency of use.
Despite the reduction in paid links, Ask Jeeves brought in $94 million in revenue for the quarter, compared with $94.9 million in the previous quarter.
Diller said the cuts in ad inventory were determined to offset any impact on per-query revenue with increases in queries and repeat site visits, bringing what Diller called "swift payback."
The move follows news Ask Jeeves will launch an auction-based marketplace for paid search listings, which will appear in the top few listings above its paid listings from Google.
Overall revenue for IAC, not counting Ask Jeeves or the soon-to-be-spun-off Expedia, reached $1.4 billion for the quarter, up from $976 million for the same period last year. Revenue from advertising and media on IAC's Citysearch came in at $11.5 million, up 66 percent from $6.9 million in the same quarter of 2004. It was Citysearch's first-ever profitable quarter.
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Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.
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