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Ask Jeeves Files to Raise Up to $400 Million
Wednesday, June 09, 2004
Ask Jeeves filed a registration with federal regulatory authorities
today to sell up to $400 million of shares and other securities.
The Emeryville, CA, search engine recently closed a $501 million acquisition
of Interactive Search Holdings. Ask Jeeves said in its filing with
the Securities and Exchange Commission that it planned to use proceeds
from any stock sale for a variety of corporate purposes, including
"to fund acquisitions of technologies or businesses or to obtain
the right to use additional technologies." The company said it
has no pending deals.
Ask Jeeves has moved to establish itself as a credible alternative
to search giants like Google and Yahoo. The ISH acquisition raised
its share of the search market to 7 percent, the company said. It
also has its own search technology, Teoma, which recently fared
credibly against Google and Yahoo in a Vividence test of search
engine relevancy.
Any stock sale would replenish Ask Jeeves' coffers. After paying
$144 million in cash as part of the ISH deal, the company has about
$50 million left in cash and short-term securities. Ask Jeeves could
use the extra money to further its stated strategy of building its
search market share and offering differentiated search entry points.
One possible target is Web portal Lycos, which has been put up
for sale by its parent company, Terra Lycos, for a reported price
of around $200 million. Lycos overhauled its portal in February,
emphasizing online dating, gaming and Web log services. As part
of the restructuring, it cut 20 percent of its staff and outsourced
its ad sales to 24/7 Real Media.
Lycos drew 26.8 million unique visitors in April, according to
Nielsen//NetRatings.
Under terms of the registration, Ask Jeeves retains the right to
sell common or preferred stock, depository shares, debt securities
and warrants. The company can decide the number of sales, their
timing, size and price.
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