Ask Jeeves Reports Doubled Profits
The company's strong performance for the quarter led it to raise its guidance for expected full-year revenues.
Ask Jeeves more than doubled its profits from last year, posting third quarter net income of $10.7 million, or $0.15 per share, the company reported today.
This compares to income of $3.8 million, or $0.07 per share, for the comparable year-ago quarter. Revenues for the quarter grew 178 percent to $75.7 million, compared with $27.2 million for the same quarter last year.
The company’s strong performance for the quarter, its first since it acquired Interactive Search Holdings in May, led it to raise its guidance for expected full-year revenues.
“At this time last year, we provided guidance for revenue growth of 30 percent and earnings per share of 38 percent for 2004. Today, as a result of strong organic growth and acquisitions, we are expecting to deliver revenue growth of nearly 145 percent and earnings per share growth of 160 percent for this year,” said CFO Steve Sordello.
For 2005, Sordello expects revenue growth to come primarily from search. The company plans to increase investment in international expansion, the iWon and MyWay portals, technology development and marketing.
According to CEO Steve Berkowitz, much of Ask Jeeves’ success this quarter came from making Ask.com more personal, through the launch of My Jeeves; more local, through a partnership with CitySearch and improvements to maps and directions; and more relevant due to improvements in its Teoma algorithm.
Results from its acquired portals, iWon and MyWay, were not as strong as the company had hoped, he said, which have led the company to commit time and money to improve them for next year.
“When we see an opportunity to take a property that hasn’t been invested in, but has a great value proposition for consumers, we’re going to execute on that. We want to build a network of users that use all of the Ask Jeeves suite of products. I believe the investments we’re going to make in portals will benefit us across all our properties over time.
Berkowitz feels that AJinteractive, formed last week through the consolidation of sales forces for Ask.com and the ISH properties, gives the company a strategic advantage with advertisers.
“We now touch the advertiser with more than just search products. When we look at AJinteractive, what we see is an opportunity to diversify our revenue stream across a broader base of advertising types, with different ways to monetize users across the Web, not just on our own properties,” Berkowitz said.
Google doubled its profits this quarter, reporting net income of $52 million, or $0.19 per share. Yahoo reported net income of $253 million for the quarter, or $124 million, not counting the post-IPO sale of a quarter of its stake in Google.
Shares of ASKJ closed at $34.99, up $2.57 on heavy volume, before today’s news.
