Ask Jeeves Hits A Homer

  |  April 21, 2004   |  Comments

The search engine outdoes expectations and raises its financial forecast for 2004.

Search engine Ask Jeeves hit a homer in the first quarter of 2004, with net income of $13.4 million, or 23 cents a share. Revenue was $39.2 million, a 73 percent jump over revenue for the same quarter last year.

The driver of the home run was 42 percent growth in search queries on Ask Jeeves' proprietary Web sites, according to Steve Berkowitz, the company's CEO. The company also said it plans to put more of its revenue to work by increasing investment in its business over the next few quarters.

"We will continue to increase our investment in technology, site experiences and marketing. We'd like to make Teoma even more relevant and unlock more of its potential," said Berkowitz on the company's conference call with investors. "We'll speed up the launch of smart search features and we'll be more opportunistic with our marketing spend. We believe that we have the ability to innovate and change the landscape in search and these investments will allow us to accelerate those plans."

Ask Jeeves' 2004 first quarter far outdid the performance for the first quarter of 2003. In that quarter, GAAP income from continuing operations was $8.5 million, or 17 cents per share.

"It was a very good quarter, as we expected," said Safa Rashtchy, senior analyst at US Bancorp Piper Jaffray. "They have seen a bump in their traffic and they are getting to be a much bigger player. I think the guidance is conservative. They are playing in the best market and they are having a very good time."

Ask Jeeves is not the only search engine to rack up successful numbers for the quarter. Industry bellwether Yahoo reported even more outstanding results earlier this month.

Steve Sordello, Ask Jeeves' CFO, said revenue in the paid placement product line was up 80 percent, branded advertisements 15 percent, paid inclusion 2 percent and licensed revenues from a joint venture in Japan were up 2 percent. (Ask Jeeves recently decided to stop offering some of its paid inclusion products.)

The company is also phasing out what it calls "non-targeted" advertising, or banner ads. It recently removed banner ads from its UK site, and expects to continue that process.

"We believe that non-targeted advertising limits growth and is not beneficial to either the user or the advertisers," said Berkowitz. "Though this may reduce revenue in the short term, we believe this will significantly improve user satisfaction and increase loyalty in future quarters."

For the second quarter of 2004, the company predicted revenue of $38 million. It expects per-share earnings, excluding amortization, of 17 cents and net earnings of 16 cents per share.

These figures are for Ask Jeeves alone, not including income from its soon-to-be new acquisition, Interactive Search Holdings (ISH). Including ISH, second-quarter revenue is expected to be $55 million, with per-share earnings, excluding amortization, of 21 cents and net income of 15 cents.

For the full year, the company now expects revenues of about $255 million. In its earnings report for the fourth quarter of 2003, Ask Jeeves had upped 2004 financial guidance to revenue of $142 million. The full-year guidance includes ISH.

ClickZ Live Toronto On the heels of a fantastic event in New York City, ClickZ Live is taking the fun and learning to Toronto, June 23-25. With over 15 years' experience delivering industry-leading events, ClickZ Live offers an action-packed, educationally-focused agenda covering all aspects of digital marketing. Register today!

ABOUT THE AUTHOR

Janis Mara

COMMENTSCommenting policy

comments powered by Disqus

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

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Gartner Magic Quadrant for Digital Commerce

Gartner Magic Quadrant for Digital Commerce
This Magic Quadrant examines leading digital commerce platforms that enable organizations to build digital commerce sites. These commerce platforms facilitate purchasing transactions over the Web, and support the creation and continuing development of an online relationship with a consumer.

Paid Search in the Mobile Era

Paid Search in the Mobile Era
Google reports that paid search ads are currently driving 40+ million calls per month. Cost per click is increasing, paid search budgets are growing, and mobile continues to dominate. It's time to revamp old search strategies, reimagine stale best practices, and add new layers data to your analytics.

Jobs

    • SEO Specialist
      SEO Specialist (NJM Insurance Group) - West TrentonNew Jersey Manufacturers Insurance Company is an industry leader among its peers and the largest...
    • Paid Search / Search Engine Marketing (SEM, PPC) Specialist
      Paid Search / Search Engine Marketing (SEM, PPC) Specialist (HeBS Digital) - New York  JOB TITLE:        ...