Ask Jeeves flogs enterprise search biz

30/05/2003 Written by Drew Cullen

Ask Jeeves has done a reverse FAST by flog­ging its enter­prise search busi­ness. It will con­cen­trate on its con­sumer busi­ness and is rais­ing $100m in con­vert­ible notes to fund expansion.

Jeeves Solu­tions’ new owner is Kanisa Inc, a Cal­i­for­nia devel­oper of cus­tomer ser­vice software.It is stump­ing up $4.5m in cash and loan notes for 41 staff, 40 cus­tomers and Jeeves One tech­nol­ogy. Jeeves Solu­tions saw sales tum­ble last year to $15.4m, 55 per cent down on 2001 ($34.4m).

But sales are chug­ging along nicely on the con­sumer side. For Q2, Ask Jeeves now expects rev­enues of $23.5m and a pro forma profit of $0.07 per share from con­tin­u­ing oper­a­tions, up from pre­vi­ous guid­ance of rev­enues of $22.5m and 0.05 per share.

For 2003, Ask Jeeves fore­casts rev­enues of $94 mil­lion and a pro forma profit of $0.26 per share from con­tin­u­ing oper­a­tions. Pre­vi­ously it expected rev­enues of $92 mil­lion and a pro forma profit of $.25 per share from con­tin­u­ing oper­a­tions. The com­pany notes that sales on con­tin­u­ing oper­a­tions for the year will be 45 per cent higher than 2002.

Ask Jeeves claims 25 per cent reach of all searchers in North Amer­ica and sec­ond place in the US “pure search” mar­ket, pre­sum­ably behind Google. The com­pany sweet­ened the news of its cash rais­ing exer­cise yes­ter­day with an improved per­for­mance update, on the back of a big upswing in adver­tis­ing.

Pre­sum­ably, Google Adwords, in oper­a­tion on Ask Jeeves’ US sites for nine months now, has had a big part to play, so the company’s biggest com­peti­tor could also be its biggest sales house. Ask Jeeves loves Google Adwords so much that this month it ditched Espot­ting, Europe’s biggest provider of paid-​for search list­ings, in favour of Google for its UK site.

The search engine sec­tor is under­go­ing mas­sive reshap­ing: in Feb­ru­ary, FAST (Fast Search and Trans­fer) sold its con­sumer search busi­ness to Over­ture, the world’s biggest paid-​for search list­ing firm, for $70m cash upfront, with a per­for­mance bonus of up to $30m avail­able. In the same month, Over­ture bought AltaVista for $140m in paper and cash.

In Decem­ber 2002, Yahoo! announced the $235m cash pur­chase of Ink­tomi, the for­mer high-​flying search engine firm. The pre­vi­ous month, Ink­tomi tidied itself up for sale by sell­ing its enter­prise search busi­ness to Ver­ity for $25m. ®

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