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Major changes afoot for Ask

The company hopes to expand its share of the $7-billion online ad market with a revised search engine.

June 05, 2007|Alex Pham | Times Staff Writer fields one-tenth of the Web search queries that Google Inc. does. So why bother?

It turns out there's a lot of money to be made on winning even 5% of the market for search, a $7-billion business that's growing more than 30% a year, according to research firm EMarketer Inc.

To keep its 30 million U.S. users loyal, and maybe even score a few new ones, the search engine formerly known as Ask Jeeves is launching a broad makeover today, including an interface that makes online search look very different than it has to date.

Referred to as Ask 3D inside the company, the revamped search engine groups results by media type, including video, music, photos, news and blogs.

"The Internet has evolved, but search has remained relatively conventional," said Jim Lanzone, chief executive of the Oakland-based company. "Ask 3D is a radical leap forward. It does multiple searches for you and gives you the results on one page in a simple and elegant way."

The new look is part of a significant investment's parent company, Barry Diller's IAC/InterActiveCorp. Thanks to changes to the underlying search algorithm, which decides which pages to show, expects to start delivering more-relevant and complete results later this year. It plans to spend $100 million to advertise the changes.

Analysts say IAC, which bought Ask Jeeves for $1.85 billion in 2005, wouldn't be pouring money into Ask if it were too small to compete with the likes of Google, Yahoo Inc. and Microsoft Corp.

"The truth is, 5% is a lot," said Barry Parr, an analyst with Jupiter Research. "There's an opportunity to participate in a good deal of advertising revenue."

For Ask, whose share of online searches has bounced between 5% and 6% since the beginning of 2006, that's translated into hundreds of millions of dollars in advertising sales. Though IAC does not break out Ask's revenue, the business accounts for the vast majority of the $544 million in 2006 revenue posted by the company's media and advertising group, which also includes Citysearch and Evite. The group posted a 43% increase in first-quarter revenue, to $168 million, and a $10.5-million operating profit.

"Having a small piece of a very valuable pie is good," Lanzone said.

Some analysts liken Ask's position to Apple Inc.'s place in a market dominated by Windows-based personal computers.

"Ask, like Apple, has a hip factor that the others don't have," said Chris Sherman, executive editor of industry newsletter

Part of Ask's strategy is to look, and think, different.

"In the past, they may have looked too similar to Google," which commanded 50% of the search queries in April, said independent analyst Greg Sterling. "So, if users are satisfied with what they have, why should they change? Ask is now answering that question in a more powerful way."

Google last month unveiled its own update, called Universal Search, to include videos, images, blogs and other media in its top links. But the company deliberately kept its page looking much the same as before. Ask 3D looks substantially different.

"Google's position as market leader makes it hard for them to do anything radical," Sterling said. "Ask is in a better position to take more chances."

"If we make Ask more productive, people will reward us with their loyalty," Lanzone said.



Getting answers

Percentage share of the search market

*--* First quarter 2006 First quarter 2007 Google sites 42.2% 48.0% Yahoo sites 28.1 27.9 Microsoft sites 13.5 10.7 Ask Network 5.8 5.1 Time Warner Network N/A 5.0



Source: ComScore

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