Ask Jeeves Files to Raise Up to $400 Million

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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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