Can Ask Leverage Microsoft/Yahoo Deal to Gain Share?

Yahoo’s search ad deal with Microsoft has been touted as a boon for competition. Yet, whether the deal will actually help Ask, the fourth largest search engine, is debatable.

The IAC-owned search firm isn’t exactly starting from a strong competitive position. Though it’s held the fourth ranking in terms of search market share for quite some time, it accounted for just 3.9 percent of searches in June 2009 according to comScore. And that was down from June 2008, when it attracted 4.3 percent of searches.

Ask’s biggest problem when it comes to scoring search marketing dollars is users, said Kevin Lee, CEO of SEM firm Didit and a ClickZ Experts columnist. When Microsoft’s Bing takes over for Yahoo, he continued, “Ask becomes number three, but their inventory doesn’t change.”

Still, the company sees bright spots ahead; some it hopes will result from the Yahoo/Microsoft partnership. “This is going to be a distraction for these two companies,” said Scott Garell, named president of Ask Networks in May. “For us, if those two huge companies are focused on that and we’re focused on innovation…we think we can score some points during that period.” Of course, Google stands to benefit from the same factor.

“When [users] see the results for Yahoo and Bing are the same, we become this other third choice,” contended Garell. Along with new users, Ask could stand to gain share through additional distribution deals if some publishers decide to leave Yahoo. The company distributes search results through toolbars and Web sites such as Photobucket. “We think there’s a chance to win some share there,” he added.

For now, many search marketers rely on their Google ad buys to get them placement in Ask results; Google has an ad distribution deal with Ask. “Search marketers generally don’t think about Ask at all,” Lee said. “It’s too small to bother running the ads in directly.” Ask also sells its own sponsored listings.

But Ask thinks that if the Microsoft/Yahoo deal is approved, it could gain leverage when it comes to its distribution deal with Google. The contract won’t be due for renewal for three and a half years, but Garrell said when that time comes, “We think that will lead to a more competitive marketplace and potentially a better deal for us.”

IAC CEO Barry Diller said as much himself during the company’s Q2 2009 earnings call in July. Noting the company’s relationship with Google is “very good,” he said he believes Ask will gain share of search queries by the time the contract is up. “I think we’ll grow, which is certainly our plot and I think it’s a rational, reasonable plot. And I want to have two players out there wanting to get our incremental business, which is a real value to these companies, particularly if it is a tipping scale in terms of greater competition for one or a switch to the other.”

The firm may already be benefitting from the Microsoft/Yahoo pairing as Yahoos decide to jump ship. “We’re already seeing lots of resumes in terms of recruiting top people,” said Garell. “I’m seeing a lot of Yahoo on the top of the resumes.” Ask is hiring in product management, search engineering, and distribution.

But while Microsoft has garnered initial critical acclaim for its Bing search engine, and reportedly is spending $90 million on a mass market ad campaign, Ask has chosen to aim its marketing efforts at specific groups. It set its sights on NASCAR fans by becoming the official search engine of the stock car racing association in January, and powering search on NASCAR.com. It also enhanced related search results, and lets users choose skins for Ask.com featuring drivers or race cars.

“We made a real commitment to rank and crawl almost anything out there [related to NASCAR],” Garrell told ClickZ News in an earlier June interview. “We knew that this fan was famously loyal to its sponsors.”

Lee is skeptical of the NASCAR approach, suggesting it only appeals to search marketers looking to reach the racing sports audience. “I don’t see it as a viable way for Ask to move the needle,” he said. In September, Ask plans to launch a campaign to attract what it calls another big audience segment.

Ask also plans to focus on semantic search, an area in which the company believes it excels, at least in terms of the number of natural language queries it attracts from users asking direct questions. The NASCAR campaign actually serves as a test bed for the firm’s semantic technologies. In January, Ask said in its corporate blog that the sport generates “massive amounts of structured data.” Ask’s EVP of Global Search and Answers Tomasz Imielinski said that with its Direct Answers from Search technology, “we no longer rely on text-matching simple keywords, but rather we parse users’ queries and then we form database queries which return answers from the structured data in real time. Front and center. Our aspiration is to instantly deliver the correct answer no matter how you phrased your query.”

At this point, however, it’s unclear how that capability will translate into more market share or ad revenue. “We are absolutely thinking strategically about how to leverage that,” Garrell said.