Search Engine Marketing
Ask Jeeves Bounces Back from the Brink of Extinction
February 2005
After almost calling it quits and closing their doors four years ago, Ask Jeeves has made a slow and steady recovery, establishing itself as a player in the search engine space.
Ask Jeeves, found at www.ask.com, ended 2004 on a high note by moving their headquarters from Emeryville, California into a large, downtown high-rise in nearby Oakland. The big move was supposed to take place back in 2001. But shortly before the move was to occur, the dot-com crash forced them to layoff half their employees and pay $16 million to get out of the 10-year, $80 million lease that they had signed.
Ask Jeeves, named after a butler from the books of English novelist P.G. Wodehouse, was founded in 1996 by David Warthen, the company’s current Chief Technology Officer, and Garrett Gruener, a venture capitalist. The website went live a year later and attracted millions of searchers with its fresh, innovative feel and concept that it could answer direct questions typed into the search box. But it turned out the technology that supported the system wasn’t good enough to deliver what they promised and Ask Jeeves soon gained the reputation of providing mediocre search results compared to competitors like Google, who were experiencing a huge amount of success.
Ironically, it was a deal with Google that kept Ask Jeeves afloat and turned the tides on their fate. Ask Jeeves agreed to run sponsored advertising links on their site, currently supplied by Google. This marketing became a big moneymaker and is now a standard in the search industry. In 2002, Ask Jeeves partnered with Google to sell $100 million worth of ads on Ask.com over three years and split the profits paid by the advertisers. Advertisers must pay each time someone clicks on these ads, called sponsored links. This “partnership” was recently extended to 2007.
In the last few years, Ask Jeeves has worked on improving their technology through numerous acquisitions such as purchasing Teoma Technologies and Interactive Search Holdings Inc. Teoma software studies the context of web pages to determine how relevant they are. This is most beneficial in determining which sites are most relevant and, most likely, respected. Interactive Search Holdings Inc. operates the portals Excite.com, IWon.com and MySearch.com. These newly acquired additions have contributed to better search results for users of Ask Jeeves.
Although Ask Jeeves users may number less than users of Google, Yahoo and Microsoft, it seems they tend to remain very loyal.
"Jeeves is sitting in a position today that is so different from a year or two years ago, where we sat in some cases on a precipice," says Steve Berkowitz, the company's chief executive. "We can still go up or down, but the difference between our up and down today is that we have a sustainable business model and that no matter what happens, we are going to be in business."
In 2003, Ask Jeeves earned a profit of $24.8 million on $107.3 million in revenue. Helped by acquisitions, the company expects to post a profit of around $49.5 million on $255 million in 2004 and hopes to continue to do even better in 2005.
With all these improvements, Ask Jeeves still has a long road ahead in claiming a bigger piece of the search engine market and changing negative conceptions about them that may still be out there.
"We're like a little kid on the playground who was skinny and could be pushed around," says Jim Lanzone, senior vice president of search properties for Ask Jeeves. "We're bulked up but haven't quite gotten the respect."
Only time will tell.
|
