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Where's Jeeves? Web Firm Is Glad You Asked

August 11, 2003|From Associated Press

It cost online search engine operator Ask Jeeves Inc. more than $100 million to create a well-known brand built around a drawing of a butler.

Now the Emeryville, Calif.-based company is spending a little more money to let people know that there is more to its search engine than a cartoon.

In its first major marketing push in two years, Ask Jeeves this month is touting its search prowess in a $6-million campaign consisting of billboard and magazine ads that exclude Jeeves, the mascot butler.

But he isn't retiring -- he remains prominently featured on Ask Jeeves' Web site. But by keeping Jeeves out of the ads, the company is hoping that consumers will try to find him.

"If the butler isn't there, we think more consumers might wonder what happened to him and come to our site to see if he's still around," said Ask Jeeves President Steven Berkowitz. "We are trying to communicate the message that there is something different going on at our company."

The unusual strategy takes aim at a frustrating problem for Ask Jeeves, which encourages Web surfers to submit search requests in question form. Although Berkowitz believes Ask Jeeves has built a search engine "second to none," it isn't getting much respect on the Internet.

Ask Jeeves accounted for just 3% of U.S. searches in June, ranking it a distant fifth behind Google (with a 32% share of searches), Yahoo (26%), America Online (20%) and MSN (15%), according to market research firm ComScore Networks Inc.

The meager share of the U.S. search market contrasts with Ask Jeeves' bigger slice of total traffic. The Ask.com Web site attracted 16 million visitors in June, or about 13% of Internet search traffic, ComScore said.

"A lot of people know about us," Berkowitz said. "They just aren't using us."

It's a weakness that Ask Jeeves could not afford to address until recently.

Like a lot of Internet businesses, Ask Jeeves curtailed its once-prolific spending during 2001 and 2002 to survive the dot-com shakeout.

In 1999 and 2000, the company spent $116.9 million on sales and marketing, nearly outstripping revenue of $117.7 million in that time. After sustaining a $425-million loss in 2001, Ask Jeeves began to recover in late 2002.

The company reported earning $12.1 million through the first half of this year, reversing an $18.9-million loss in the same period a year earlier. The turnaround has helped make Ask Jeeves a Wall Street favorite this year, with the shares rising nearly sixfold since the end of 2002; on Friday the stock gained 36 cents to $14.85 on Nasdaq.

For all its progress, Ask Jeeves would be in worse shape if not for a partnership with Google Inc., which operates one of the search engines targeted in its ad campaign. Advertisers that used a Google service to bid for prominent listings in Ask Jeeves search results accounted for 49% of Ask Jeeves' revenue from continuing operations in its most recent quarter.

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