Ask Jeeves Grows Ad Revenue, Search Share
Fourth-quarter 2005 revenue and market share were up at Ask Jeeves and Citysearch, the two main ad vehicles owned by Internet conglomerate IAC/InterActiveCorp.
Revenue at Ask.com, the division responsible for Ask Jeeves, was up 9%, largely due to increased search traffic in North America. Media and ad revenue at Ask Jeeves and Citysearch, IAC’s local directory service, hit $109.5 million for Q4 2005. That compares with $9.9 million in ad revenue during the same period in 2004; IAC did not purchase Ask Jeeves until July 2005.
Ask’s share of the U.S. search market grew to 6.3% in the last quarter of 2005, a 20% boost over its portion in Q4 2004. But revenue per query fell off slightly as a result of IAC’s early-2005 decision to cut back on ads per results page, in order to improve the user experience. Citysearch posted its tenth consecutive quarter of revenue growth, marking the first time the property showed a profit for the entire calendar year.
IAC chairman and CEO Barry Diller said the company would invest aggressively in its core businesses in the coming year.
Diller said Ask Jeeves was growing faster than any of the four other major search engines, largely because of the decision last year to cut back on results-page ads. “The metrics say it all: Users, retention and frequency are all up year over year and quarter over quarter,” he said. The company plans to favor market share over revenue growth in the coming year, in the belief that revenue increases will follow. Ask Jeeves will see a major brand re-launch at the end of Q1 2006, with new features that will continue to integrate IAC’s network of more than 30 vertical search and content sites. Citysearch will beef up its sales force to help the service stay competitive in the online directory space, which is now dominated by the Internet Yellow Pages companies.
In retail, the company is in the process of integrating its mid-2005 purchase of Cornerstone Brands, a portfolio of catalogs and Web sites that sell proprietary home products and apparel. Diller said five of those Cornerstone brands are now selling live on the company’s HSN cable shopping network, and more will follow. Cornerstone is now “about 30% online with three different catalogs,” he said, and will add both new brand and product distribution channels both direct and in-store during the coming year.
In January 2006, IAC also announced an agreement to acquire Shoebuy.com, an online footwear retailer with a “virtual inventory” model that allows it to offer 400,000 products from 250 manufacturers. That model will be adopted by other IAC retail group properties in the course of this year.
And HSN will step up its investment in interactive technologies that will let visitors to its HSN.com shopping Web site shop that will allow consumers “to shop whenever, wherever and however their lifestyle dictates,” Diller said.
IAC total revenue for Q4 2005 was $1.79 billion, a 45% increase from the same quarter last year. For the year, the company posted $5.75 billion in revenue, a 37% increase from 2004. Quarterly net earnings were $113.1 million, against a loss of $45.9 million in the same period last year. Annual net earnings jumped to $868.2 million, from $151.8 million in 2004.
Diller said IAC would also move this year to expand Ask Jeeves’ international market share, particularly in the U.K. and Europe. Yesterday, Ask.com announced it had opened a European research center in Pisa, Italy. The company recently launched search sites in Spain and Germany.
