Jeeves acquisition fires up search wars

IAC/InterActiveCorp has agreed to buy online search engine Ask Jeeves for $1.8bn. The acquisition is designed to allow IAC to tap into the search market, which is "huge and growing", IAC chief executive Barry Diller said in a conference call yesterday.

IAC has built up a network of websites through acquisitions, including travel service Expedia, online dating site Match.com, invitation management service Evite.com and ticket agent Ticketmaster.com.

The company is also a large player in the market for home shopping TV networks with stations in the US, Germany and Japan. It claims 44 million unique visitors a month across its portfolio of sites.

Ask Jeeves ranks fifth in the search engine market with a three per cent share in North America, behind Google, MSN, Yahoo and AOL, according to data from Forrester Research.

Although Ask Jeeves is one of the smaller players in the online search market, IAC is confident that it can increase its share. "Ask Jeeves is the search engine with the best local content and merchant information," said Diller.

Local search is one of the most contended areas in the online search market and IAC has a strong online presence through its CitySearch service.

IAC plans to improve traffic to Ask Jeeves by adding search boxes to all its websites. Web visitors will also find links to IAC's websites when they use the search engine.

Both IAC and Ask Jeeves are likely to benefit from the acquisition, according to Charlene Li, principal analyst at Forrester Research.

"It could give IAC's companies a much bigger leg up, especially in the area of organic search optimisation," she said.