Search engine Ask Jeeves has announced that it will split into two divisions, cutting 180 jobs and saving $45m in the process, in an effort to be profitable by this time next year.
Ask Jeeves, which answers queries submitted as sentences rather than keyword strings, is to split its operation into a business solutions and a web properties unit, losing a quarter of its workforce and reducing costs by an estimate $45m in 2001.
The business solutions unit will concentrate on licensing Ask Jeeves' technology, whilst the web properties unit will cover all revenue streams generated from sales on Ask.com, DirectHit.com and AJKids.com. Each unit will have independent profit and loss accountability, including separate sales, marketing and engineering resources.
Last week, the company warned that it expected to make a loss of $18m in the fourth quarter, 50 per cent more than US analysts had predicted, and said that Rob Wrubel was to resign as chief executive, but would remain as executive vice president of market development. He was replaced by Skip Battle.
The restructuring is expected to cost Ask Jeeves between $10m and $12m. The company said it expects to achieve profitability in the fourth quarter of 2001.
Battle said: "We have taken the steps that we believe will produce sustainable, long-term, profitable growth. We believe the realignment creates a stronger organisation that has the financial, organisational and technology assets in place to transition Ask Jeeves into the mainstream economy."
Adam Klein, president of Ask Jeeves, added: "In the last year Ask Jeeves experienced hyper-growth and became over-resourced for the new market environment. In spite of the changing market dynamics, we believe we have established a solid foundation from which to grow."
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