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IAC to buy Ask Jeeves
US travel giant InterActiveCorp has signed a deal to buy Ask Jeeves Inc for $1.85 billion.
The acquisition marks IAC’s foray into the arena of search engines, currently dominated by Google. The deal, worth $1.85 billion, is based on exchange of shares – IAC will issue 1.27 shares of for each Ask Jeeves share.
IAC says it then intends to buy back at least 60% of the shares. IAC chairman and chief executive, Barry Diller, said: “Ask Jeeves was founded almost ten years ago based on the idea that simple text search results alone are not sufficient or satisfying – but, rather, that consumers want answers to questions.”
He added that he intends to make Ask Jeeves a global brand and launch it as a wireless service for searches on “any device”.
Brands already owned by IAC include Expedia, Hotels.com and Ticketmaster. IAC says Ask Jeeves is in the top four search engines and has around 42 million US unique users per month, which combined with IAC’s monthly unique users in the US takes the total to just over 71 million unique users.
But according to internet monitors, comScore Networks, it comes in fifth – the largest share of the US online search market is taken by Google sites (35%), then Yahoo (32%), MSN sites (16%), Time Warner (9.6%) and then Ask Jeeves (5.1%).
Commenting on the deal senior vice president of comScore Networks, Dan Hess said: “The combination creates intriguing growth opportunities, given that there is relatively little overlap between the IAC and Ask Jeeves audiences.” “Having said that, it’s no secret that there’s fierce competition in search, and most major players are working to further extend their own brands into industries that have been IAC strongholds.”
Following the acquisition the Ask Jeeves brand will be retained. The deal is still subject to approval from Ask Jeeves shareholders and from regulatory bodies.
Report by Ginny McGrath
Ginny McGrath
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