Updated from 9:11 a.m. ESTAsk Jeeves ( ASKJ) said first-quarter earnings and revenue will be higher than forecast, igniting a rally in the Internet search space Thursday morning. The company also announced the acquisition of Interactive Search Holdings, parent of the Excite Network. Ask Jeeves, based in Emeryville, Calif., expects to earn 17 cents a share on revenue of $37 million in the quarter ending next month. It also predicted pro forma earnings of 18 cents a share. Analysts surveyed by Thomson One Analytics were predicting pro forma earnings of 16 cents a share and revenue of $35.25 million. Ask Jeeves cited higher-than-expected traffic to its Web sites. For all of 2004, excluding any accretion from the Interactive Search acquisition, Ask Jeeves expects to earn a pro forma 68 cents a share on revenue of $148 million. Analysts surveyed by Thomson One Analytics were forecasting pro forma earnings of 64 cents a share on revenue of $146.6 million. The company expects the acquisition, in which it will pay $150 million in cash and issue 9.3 million common shares, to be "highly accretive," boosting 2004 revenue to $220 million to $230 million and pro forma earnings to 85 cents to 90 cents a share. Interactive Search is the parent of Excite, iWon, My Way, My Search and Max Online and, according to Ask Jeeves, saw about 700 million searches in the fourth quarter. By comparison, Ask Jeeves' proprietary sites had 680 million searches during the quarter. The news sent Ask Jeeves stock soaring $7.14, or 34.5%, to $27.85. The shares were going for $2.50 last March. LookSmart ( LOOK) was up 15 cents, or 7.9%, to $2.06, while FindWhat.com ( FWHT) was up $2.16, or 12.2%, to $19.91. Another recent Nasdaq screamer, Mamma.com ( MAMA) had been up as much as 6% following the Ask Jeeves news. It recently reversed ground and fell $1.13, or 8.9%, to $11.57 after announcing a small acquisition.