Local Search

By Matthew Hicks  |  Posted 2005-03-22 Print this article Print

But New York-based IAC must do more than simply draw more traffic to its various sites from the acquisition. Analysts noted that IAC could face problems as it tries to grow Ask Jeeves market share, given the intense competition among search players. Click here to read about Ask Jeeves getting personal. Mark Mahaney, a financial analyst at American Technology Research Inc., raised doubts about IACs ability to initially increase Ask Jeeves market share. He also was skeptical about IACs abilities to integrate Ask Jeeves with other IAC properties and find new ways to generate revenue.
"There may be revenue synergies—especially with [IAC] promoting the Ask Jeeves search box on every [IAC] site—but our view is that [IACs] record of generating revenue synergies has been limited to date," Mahaney wrote in a research note. "Further, we note that to date, [IAC] has had difficulties in integrating its numerous acquisitions."
To Weiner, the acquisition is a broader media play by IAC, letting it gain not only an entry into search but into Ask Jeeves portal-like holdings that pit it most directly against Yahoo and MSN. Ask Jeeves last year doubled its search market share when it acquired Interactive Search Holdings Inc., which included such properties as the Excite and My Way portals. "Everybody is going to be watching on execution here," Weiner said. "Can Barry Diller be to Ask Jeeves what Terry Semel is to Yahoo? Maybe." Semel, the CEO of Yahoo, has been credited with helping to turn the company into a media business and reinvigorate its earnings since he joined it in 2001. One specific target for Diller is local search. Ask Jeeves in the past year expanded its local options to compete with other top search engines. As part of the services, Ask Jeeves partnered with Citysearch. Meanwhile, Citysearch also has been growing its local advertising program and local business content, which it has created over the past eight years, Diller said. "Our goal is to make Ask Jeeves the search engine with best local search content and merchant information out there," Diller said. Local search is a growing market and an area where global search engines hope to grab a larger portion of advertising dollars from local businesses. The Kelsey Group predicts that the local-search market will grow to $3.4 billion in revenues by 2009. "Weve seen IAC make big predictions in the past and fail to deliver," Greg Sterling, program directory at The Kelsey Group, said in an e-mail interview. "I think the potential is there to make Jeeves a leader in local search, if the focus and the resources are put behind the effort. "But local is as competitive as general Web search, if not more, and simply saying it will not necessarily make it so." Check out eWEEK.coms for the latest news, views and analysis on enterprise search technology.

Matthew Hicks As an online reporter for eWEEK.com, Matt Hicks covers the fast-changing developments in Internet technologies. His coverage includes the growing field of Web conferencing software and services. With eight years as a business and technology journalist, Matt has gained insight into the market strategies of IT vendors as well as the needs of enterprise IT managers. He joined Ziff Davis in 1999 as a staff writer for the former Strategies section of eWEEK, where he wrote in-depth features about corporate strategies for e-business and enterprise software. In 2002, he moved to the News department at the magazine as a senior writer specializing in coverage of database software and enterprise networking. Later that year Matt started a yearlong fellowship in Washington, DC, after being awarded an American Political Science Association Congressional Fellowship for Journalist. As a fellow, he spent nine months working on policy issues, including technology policy, in for a Member of the U.S. House of Representatives. He rejoined Ziff Davis in August 2003 as a reporter dedicated to online coverage for eWEEK.com. Along with Web conferencing, he follows search engines, Web browsers, speech technology and the Internet domain-naming system.

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