Ask Jeeves allows users to ask questions in natural language
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The internet investment firm headed by US media mogul Barry Diller is to buy web search engine Ask Jeeves for $1.85bn (£970m).
Ask Jeeves is the fifth most-queried search engine in
the US and has a market value of $1.43bn, one tenth the size of Mr
Diller's IAC/InterActive.
Mr Diller said Ask Jeeves "has the potential to become one of the great brands on the internet".
The deal reflects rising competition between rival internet search engines.
Building block
"We are a small player in the land of the giants," said Adrian Cox, chief executive of Ask Jeeves' UK operations.
Mr Cox explained that the deal would provide Ask Jeeves
with the financing and resources needed to continue its current
"aggressive" growth rate.
He continued that the firm was confident of its ability
to compete with rivals such as Google, Yahoo! and Microsoft's MSN
Search.
"There is room for four major players," he told BBC
News. "There is a certain level of loyalty, but most internet users
don't use just one search engine, they use a couple."
"Search engines are the primary gateway to the internet today."
Lure of online adverts
Mr Diller's IAC owns online travel booking firm Expedia, CitySearch and internet dating site Match.com.
It is thought that Mr Diller is likely to link
CitySearch, a search site for restaurants and other services in cities,
with the Ask Jeeves search engine in order to boost internet
advertising revenue.
Users of Ask Jeeves can ask questions using natural language, such as: "What is the capital of Brazil?"
Most of the advertising on its site is sold through an arrangement with rival Google.
Search websites account have gained 36% of the online
advertising market in the US and are expected to grow by 24% a year
over the next five years, according to Merrill Lynch Equity Research.
Content challenge
Competition in the search engine market has stepped up,
and this year Google, Yahoo and Microsoft (which also has a search
engine) have been rushing to add new services.
On Sunday, The Wall St Journal reported that Yahoo, a
rival search engine to Ask Jeeves, is to buy Canada's Ludicorp Research
& Development, which runs the internet photo sharing service
Flickr.
Although no purchase price was disclosed, The Wall Street Journal reported it was likely to have cost less than $50m.
Meanwhile, internet service provider America Online has
launched a test version of a new travel website, PinpointTravel, that
enables users to compare different hotel and transport prices.
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Search engines are the primary gateway to the internet today
