|
Ask Jeeves Inc. to Be Bought for $2 Billion
Monday, March 21, 2005
AC/InterActiveCorp, the Internet company headed by Barry
Diller, is close to an agreement to acquire Ask Jeeves Inc., the
nation's fourth-largest search engine company, for about $1.9 billion,
according to an executive involved in the negotiations.
An announcement could be made as early as today.
IAC/InterActive owns a variety of Internet businesses. Its principle
holdings are Expedia, Ticketmaster, Home Shopping Network, Match.com
and CitySearch. Advertising spending on search sites is rapidly
growing and Mr. Diller's company appears to be trying to tap into
a market dominated by Google and Yahoo.
Most of Ask Jeeves's revenue comes from advertising that appears
on its sites through a contract with Google. That contract runs
through 2007.
Fourth-quarter profits and revenue at Ask Jeeves, whose brands
include ask.com, Excite.com, iWon.com, more than doubled. Net income
rose to $17.5 million and revenue rose to $86.1 million from $31.8
million a year earlier.
IAC/InterActive has 44 million visitors a month to its various
sites. CitySearch, one of its holdings, is a network of city guides
that provide information on restaurants, bars and events in different
cities. By marrying a local-search business with a global search
engine, Interactive hopes to benefit from further growth in targeted
keyword advertising, the executive involved in the deal said.
As an example, CitySearch customers can specify a certain kind
of restaurant, and choose from a list of neighborhoods in the city
they have chosen.
IAC/InterActive is expected to acquire Ask Jeeves in a stock transaction,
exchanging shares in IAC/InterActive for shares in Ask Jeeves, then
buying 60 percent of the just-issued IAC/InterActive shares back
for about $1.2 billion.
Ask Jeeves closed Friday at $24.24 a share, and IAC closed at $22.29.
The bankers in the deal are J.P. Morgan, Allen & Company and
Citibank. Ask Jeeves bills itself as an English-language friendly
Web site that encourages users to formulate searches in question
form.
|
