Last year, Barry Diller said he expected Ask.com to be the "glue" of his
Now Diller is putting that plan in motion by saying goodbye to his most famous hired help, Jeeves the butler.
Five months after
floating a plan for a butler-free future, IAC's Ask.com on Monday formally retired its longtime icon. Investors responded favorably, pushing shares up $1.40, or 4.9%, to $30.40. IAC shares have jumped 6% this year, making it one of the few major Web companies whose stock has gained in value since the start of the year.
While IAC harbors no illusions of toppling
from atop the search market, it figures it has nowhere to go but up. And while there are some signs that the market is maturing, search continues to grow at a healthy clip.
Forrester Research estimates that search marketing spending will reach $11.7 billion by 2010, a gain of 170% from 2004. The engine, which IAC purchased for $1.9 billion last year, had 6.3% of the search market in December, lagging behind Google,
America Online, according to comScore Media Metrix.
Even a small market share move could have big benefits for the company, says Jim Lanzone, the general manager of Ask's U.S. operations.
"We have 20 million users in the U.S.," Lanzone says in an interview. "The big challenge is to get these people to use the site more often."
Ask Jeeves helped popularize search in the 1990s by allowing people to pose questions in simple English. This made Jeeves, along with the Pets.com sock puppet, among the most recognized icons of the era. Though Ask Jeeves shares quadrupled on their first day of trading in 1999, they crashed after the Internet bubble burst.
People got frustrated with the poor quality of Ask Jeeves and turned to a then-upstart Google. By and large, they haven't looked back. Though the butler was well-liked, the company decided to revamp the search engine's image away from solely being the source of questions and answers, an area that has faded in popularity with Web users.
"He's best known for something that's holding us back," Lanzone said.
Ask has shown some benefits for IAC's bottom line. The acquisition of the company helped boost the company's fourth-quarter sales by 45% to $1.79 billion. IAC has been adding Ask search boxes to its other sites, which include HSN.com, Ticketmaster and Match.com.
Ask has always maintained that its search methodology yields more relevant results than Google. The new site, which the company says has the fewest ads of any engine, offers a slew of features including a tool box that allows people to easily choose what type of search they want. Like other engines, it has a desktop search and map features.
"Search is still evolving," Lanzone says. "A lot of people believe that 10 blue links on a page is the end-all of search."