Ask Jeeves to Shed Slumping Division
Thursday, May 29th 2003, 12:00 am
By: News On 6
SAN FRANCISCO (AP) _ Reinvigorated Internet search engine provider Ask Jeeves Inc. on Wednesday said it is shedding a weak link to focus on more lucrative operations that have turned the company's stock into a hot commodity.
Emeryville, Calif.-based Ask Jeeves agreed to sell a business software division to a rival, Kanisa, for $4.25 million. The sale, affecting 41 Ask Jeeves employees, is expected to close during the summer.
Revenue at the divested division, called Jeeves Solutions, has been slumping at the same time Ask Jeeves has been attracting more advertising to its popular online search sites, Ask.com and Teoma.com.
Jeeves Solutions registered revenue of $15.4 million last year, a 55 percent decline from $34.4 million in 2001. At that time, Jeeves Solutions had emerged as the most stable part of the company, accounting for half of Ask Jeeves' 2001 revenue.
But Ask Jeeves' prospects have since been reshaped by new programs that enable advertisers to bid for the right to have their Web links prominently displayed alongside online search requests related to their products and services.
``It really has become a phenomenon and I really think it is going to get even bigger,'' Ask Jeeves CEO Skip Jeeves said in an interview Wednesday.
Propelled by the influx of ads, Ask Jeeves' Web sites attracted $58.8 million in revenue, an 83 percent improvement that helped the company become profitable for the first time in its seven-year history.
The breakthrough has lifted Ask Jeeves' long-sagging stock out of the dot-com doldrums.