Ask Jeeves has stepped up to the plate and become one of the big boys on the block with its acquisition of Interactive Search Holdings Inc. for about $328 million. The huge move sent Ask Jeeves stock soaring by a third on hopes it would become a serious competitor to the top search engines, Google and Yahoo along with search portal networks like MSN and AOL.
The Ask Jeeves acquisiton of Interactive Search Holdings opens the Ask Jeeves umbrella to their new BIG properties- iWon, Excite and My Search.
The acquisition of iWon, Excite and MySearch will double Ask Jeeves’ market share to 7 percent of the search engine industry (figure from CNN), and will also boost its profits. Between all of its brands, Interactive Search had 700 million searches in the fourth quarter of 2003- 20 million more than the 680 million searches that Ask Jeeves pulled in over the same time span.
Under the terms of the agreement, Ask Jeeves will issue 9.3 million shares of common stock and options and pay $150 million in cash. This reflects an aggregate purchase price of $343 million based on Ask Jeeves’ closing price on March 3, 2004. In addition, Ask Jeeves may pay up to an additional $17.5 million in cash based on various factors including Interactive Search Holdings’ operating performance.
“The acquisition of Interactive Search Holdings will be an important step in Ask Jeeves’ growth strategy. This acquisition will double our market share, enhance our ability to compete in the fast-growing search market, and is expected to increase the financial returns to our shareholders,” said Steve Berkowitz, CEO of Ask Jeeves. “This acquisition will enable us to combine Ask Jeeves’ proven strengths in user experience, search technology and brand development with Interactive Search Holdings’ strengths in distribution and direct marketing. By leveraging these two complementary approaches to search, we expect to accelerate Ask Jeeves’ market share gains in 2004 and beyond.”
Interactive Search Holdings is one of the largest privately held online search and media companies, ranking as the 9th most visited U.S. property on the Web in December 2003 as measured by comScore Media Metrix (where it is listed as “The Excite Network”). Interactive Search Holdings’ Web properties and businesses include My Way, My Search, My Web Search, iWon, Excite and the MaxOnline advertising network.