Ask Jeeves Makes $343 Million Acquisition

  |  March 4, 2004   |  Comments

UPDATE: In a huge deal, the second-tier search engine buys privately held Interactive Search Holdings, owner of iWon and Excite.

In a staggering $343 million deal, Ask Jeeves has agreed to acquire privately held Interactive Search Holdings.

The deal will bring a number of popular sites and search services, including iWon and Excite, into the search company's domain.

"The acquisition of Interactive Search Holdings will be an important step in Ask Jeeves' growth strategy," said Ask Jeeves CEO Steve Berkowitz. "This acquisition will double our market share, enhance our ability to compete in the fast-growing search market, and is expected to increase the financial returns to our shareholders."

In October 2003, Ask Jeeves was ranked number 28 in overall traffic by comScore Media Metrix, while the Excite Network (consisting of Interactive Search's Excite and iWon properties) held the number nine spot. Interactive Search had approximately 700 million searches in the fourth quarter. This compares to 680 million searches on Ask Jeeves' proprietary sites during the same period.

Berkowitz said the company would benefit from Interactive Search's strengths in distribution and direct marketing. He hopes the company will continue to be perceived as search-centric as it was before the acquisition, although the move branches its holdings into ad representation.

"We'll have multiple brands that will offer users different search experiences through search only Web sites, search-focused portals and search-centric downloadable apps," Berkowitz said. "This will allow us to reach more users through multiple access points."

Though Ask Jeeves puts its emphasis squarely on search, the acquisition of certain Interactive Search properties, in particular the portal My Way, certainly positions it for possible growth into extra-search capabilities and even a portal-like online identity.

"It definitely strengthens their position as a tier two player; and it makes them more of a destination, because with MyWay they have things like email," said Gary Stein, a senior analyst with Jupiter Research. "It's another tick towards potential personalization down the road."

For now that won't happen, however, as Berkowitz said Ask Jeeves intends to leave the company and its holdings alone. Until further notice, he said the synergies between Ask Jeeves and its new subsidiary will mainly be reflected in the marketing of the company to advertisers.

"Our strategy is building around user need. The synergies are going to come in how we market, in how we develop products, in the way we approach the business, and the way we approach the advertisers," he said.

Interactive Search's businesses and online properties include My Way, My Search, My Web Search, iWon, Excite and the MaxOnline advertising network. The company says it's been pushing the search side of its operations for some time, and joining Ask Jeeves' portfolio will advance that goal.

After the deal goes through, Interactive Search will continue to operate out of Irvington, New York as a wholly owned subsidiary of Ask Jeeves, the companies said. Its executives have all agreed to stay on with the company, though Berkowitz declined to specify the length of their contracts.

Under the deal, Ask Jeeves will issue 9.3 million shares of common stock and options and pay $150 million in cash. The search company may also pay an additional $17.5 million if the subsidiary performs well.

The search company said it expects an immediate boost in revenue to result from the deal. For 2004, Ask Jeeves now anticipates revenues of $148 million, up $6 million over its projections.

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

ABOUT THE AUTHOR

Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Internet Marketing Campaign Manager
      Internet Marketing Campaign Manager (Straight North, LLC) - Fort MillWe are looking for a talented Internet Marketing Campaign Manager to join the...
    • Online Marketing Coordinator
      Online Marketing Coordinator (NewMarket Health) - BaltimoreWant to learn marketing from the best minds in the business? NewMarket Health, a subsidiary...
    • Call Center Manager
      Call Center Manager (Common Sense Publishing) - Delray BeachWanted: Dynamic Call Center Manager with a Proven Track Record of Improving Response...