IAC to Purchase Ask Jeeves
Barry Dillers IAC/InterActiveCorp on Monday confirmed plans to pay about $1.85 billion to acquire Ask Jeeves Inc., a deal that would marry the fifth largest Web search company to an e-commerce powerhouse.
Diller, the former Hollywood executive who pursued an aggressive acquisition strategy to build IAC/InterActiveCorp into an online ticketing and hospitality giant, gets an immediate entry into the lucrative Web search market now dominated by the likes of Google Inc., Yahoo Inc. and Microsoft Corp.
Terms of the Ask Jeeves acquisition call for IAC to issue 1.2668 shares of common stock for each Ask Jeeves share. IAC plans to buy back at least 60 percent of the number of shares it will issue for the acquisition, as part of a previously authorized share-repurchase program.
The plan is to keep Ask Jeeves as an independent brand with operations headquartered in Oakland. Steve Berkowitz will continue as Ask Jeeves CEO.
"Of the many search engines launched [10 years ago], Ask was one of the very few that established itself. We believe that in the future it has the potential to become one of the great brands on the Internet and beyond, and by beyond we mean in wireless, in the search for anything on any device," Diller said in a statement announcing the deal.
He said the purchase was justified by the rapid growth of the online advertising and search markets. "Search is now 36 percent of U.S. online advertising and expected to grow 24 percent per year over the next five years," Diller added.
During the last decade, Diller has used acquisitions to broaden the reach of IAC in the e-commerce and travel search/ticketing sector. The companys brands now include Expedia, Hotels.com, Hotwire, Home Shopping Network, Ticketmaster, Match.com, LendingTree, Citysearch, Evite, TripAdvisor and ZeroDegrees.
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