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You Asking Me?

Speculating on Who Will Buy

Friday, November 6, 2009 | Posted by Aaron Goldman

Posted In: Digital Marketing / Search Engine Marketing / Press / Press Mentions

Jeeves groundedImage Source

Last week, I was cited in a MediaPost article about IAC selling off  Here's the excerpt. More analysis follows.
Aaron Goldman, managing partner at Connectual, believes Microsoft could become a suitor to take more market share. "Since launching Bing, Microsoft's market share has gone up less than one-and-a-half points," he says. "Meanwhile, Yahoo is down one-and-a-half. So it's a wash. With Ask, Microsoft could add 4 share points in one fell swoop."
For more of my coverage on the scramble for search marketing share, read this post on my digital marketing blog -- "Inching Along: Bing Up a Fraction."

Now, for what it's worth, I worked for the MaxOnline division (fka L90) of Interactive Search Holdings (fka Excite Network) when it got bought by Ask Jeeves back in March of 2004. But by the time Ask got scooped up by IAC and permanently, ahem, grounded Jeeves (see pic), I had already moved on to Resolution Media. So I did not have the pleasure of being at Ask under Diller rule. That said, I've kept close tabs on the company over the years and have always felt like IAC never fully leveraged its search engine assets.

Here's the moral of the story -- because has such small market share, it can/should take more risks. Ask never had as much to lose as Google, Yahoo, and Microsoft. But it never acted that way. Sure it had some neat innovations over the years like Ask 3D but these features were always just spins on the same general results and mostly focused on layout, not content.

One specific missed opportunity was around personalization. IAC has access to a plethora of registration data through its various properties like, CitySearch, eVite, etc. I've long held that the perfect search engine would be one that presents options for results to be filtered based on general demographics and the social graph. For example, Men 18-34 who searched query X to click listings Y and Z. 

At one point in the not-to-distant past, rumors circulated that Ask was going to focus on becoming a niche search engine for women. While this seemed a bit far-fetched, at least it was differentiated. And the idea promised to incorporate some of the unique assets held by IAC through its other properties. But, alas, it turned out that "nothing could be further from the truth." For whatever reason, remained committed to general search and competition with the Big 3.

Another thing that always bugged me about Ask was its advertising. Remember when it tried to bring its algorithm to life? No doubt, I'm prone to being a bit of a skeptic when it comes to search engine advertising -- see "Bing: Google Caused the Recession." -- but when the algorithm isn't that good, you're not going to want to build your brand around it. Same goes for Bing and that decision-making nonsense. They'd have been better off touting their algo which is at least up to par with Google's.

But back to Ask. At this point, for all it's lack of differentiation, it still owns 4% of the search market. And that's a market worth double-digit billions. So this is still a very viable and valuable asset. As for who would value it the most, I have to believe that would be Microsoft. Outside Google, I don't know who would be able to fully monetize it. You need tens/hundreds of thousands of advertisers to serve ads against all those obscure queries and the Big 3 are the only ones that have those direct relationships. And we know Yahoo isn't investing in search anymore. So it's a matter of who wants it more, Microsoft and Google. Lately, Microsoft has been the aggressor on the distribution front so my money's on them.

Let's not forget, though, that IAC selling Ask is no sure thing. In fact, the media's running wild with this story based on an off-handed remark Diller make during an investor call. So what's the best policy right now as it relates to speculation on the future of this storied search engine? You guessed it -- don't ask, don't tell.



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