IAC Asks for a Second Chance

In reality, Ask3D hardly has to dethrone Google in order to be a wild success. Even nibbling away at the search giant's market share could make a serious impact on Ask's bottom line, given the sheer size of the search business. Google posted gross revenue of $3.7 billion for the first quarter. By contrast, the entire media and advertising group at IAC, which includes Ask, brought in $168 million.

Perhaps even more importantly, a gain in market share for Ask could translate into a big boost for many other of IAC's properties. Unique content from other IAC sites is supposed to give the search engine an edge, while at the same time helping those sites grab users.

Listings from the company's popular Ticketmaster ticketing service tell Ask local-search users about concerts, for example. And its high-profile CitySearch property provides reviews of local restaurants. Given the huge and rapidly growing number flocking to search engines, even a small uptick for the Ask search engine could spike the popularity of other IAC sites.

And helping IAC's other properties is no small thing. Shares of IAC have yet to recover from a selloff in early May that followed the company's admission during its latest earnings announcement that its shopping divisions were struggling. A week later, troubles in its LendingTree mortgage unit required a management shake-up and a cut of 440 jobs. IAC closed Monday flat at $34.80.

For Ask.com, being the little guy means having to push the envelope. "They need to take risks because of their market share," says Greg Sterling, an analyst at Sterling Market Intelligence. "They are the underdog and needed to do something bold. And they have."