Ask Jeeves Sales, Profits Grow

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Ask Jeeves yesterday reported strong sales and profit growth in the third quarter, thanks to revenue generated through Google search listings.

The Emeryville, CA, search company said sales in the quarter totaled $75.7 million, up from $27.2 million a year earlier. Ask Jeeves' net income was $10.7 million, up from $6.3 million in the year-ago period. The third quarter was the first full reporting period to include results from Interactive Search Holdings, the collection of search and portal properties Ask Jeeves acquired in a deal that closed in May.

Ask Jeeves reported a sluggish quarter for search queries, which it attributed to its normal pattern of a seasonal slowdown. Ask Jeeves' properties received 1.3 billion searches in the quarter, down 14 percent sequentially. The seasonal drop stands in contrast to Google, which last week reported that it recorded more searches over the summer months.

"We may be a little more seasonal than the typical search site," said Steve Sordello, chief financial officer of Ask Jeeves.

One weakness Ask Jeeves has identified is the portals it acquired through the ISH acquisition, particularly iWon and MyWay. CEO Steve Berkowitz said the sites were neglected by ISH, and Ask Jeeves would begin to overhaul them in 2005.

"Our ability to turn these properties around and grow them is going to be an exciting part of our future," he said.

Berkowitz compared the task to the actions Ask Jeeves took with its flagship site two years ago, when it eliminated untargeted advertising and improved the user experience. He expressed confidence that iWon, which offers users sweepstakes entries based on their use of the site, and MyWay, which carries no banner ads, have a bright future.

"We feel we have the assets and people to turn them around," he said.

The report comes on the heels of healthy sales and profit growth at Ask Jeeves' considerably larger search rivals, Yahoo and Google. Ask Jeeves distributes Google's paid search listings.

Looking ahead, Ask Jeeves expects sales of $86 million in the fourth quarter and net income of $15.4 million. Next year, the company forecasts sales of $365 million to $395 million.

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