Ask Jeeves Acquires Teoma

Ask Jeeves has purchased the Teoma search engine, which has attracted interest over recent months as a potential relevancy challenger to Google. Ask Jeeves hopes that the Sept. 9 acquisition will help the company both reenter the search results syndication market and make its own search site more appealing to consumers.

"Our search experience isn't good enough, and this makes it a whole lot better," said Skip Battle, CEO of Ask Jeeves.

Ask Jeeves does not plan to immediately close the Teoma site. It will be allowed to run alongside the company's existing Ask Jeeves or Direct Hit web sites.

"We're going to continue Teoma as its own site for quite some time and perhaps forever," Battle said.

However, Ask Jeeves will be working over the next two months to integrate Teoma's technology into its existing Direct Hit system, in order to enhance its search results.

This is the second major search acquisition that Ask Jeeves has made. In January 2000, the company purchased Direct Hit, in a stock deal valued at US $500 million. Ask Jeeves did not disclose a value to the Teoma deal to the press, but a recent SEC filing puts it at about $4 million. That's $1.7 million in cash and 2.5 million shares of stock, which is currently valued at about $1 per share.

Direct Hit was launched in 1998 and quickly gained popularity because of its then new method of measuring clickthrough to improve search results. The company signed a deal with HotBot that was expanded the next year, making Direct Hit the primary provider or HotBot's search results. In 1999, the company also gained some distribution with Lycos and MSN Search. All three deals continue today.

When Ask Jeeves purchased Direct Hit, it failed to capitalize on the company, as even Ask Jeeves admits. No new deals with major search partners were established, nor was an investment made to improve Direct Hit's coverage of the web and relevancy technology.

"We bought Direct Hit and left it fallow. We didn't invest in it or put money behind it," said Battle. "We were way too much sizzle and way too little steak."

Ask Jeeves had planned to make needed improvements to Direct Hit later this year, in order to go after new search partnership deals. It wants these deals because it believes it can make money off of paid placement listings within its results, as well as new paid inclusion listings it hopes to roll out later this year.

The planned improvements were hoped to be good enough for Ask Jeeves to cut deals with more vertical web sites, such as the one the company has with Dictionary.com. However, it now feels that the addition of Teoma's technology will make it strong enough to also compete for major partners, such as those powered by Google, Inktomi and FAST Search.

"We think we'll have a search capability that is very, very strong, together with a monetization ability that is very, very strong," Battle said. "Then we think we have a shot at tier one customers"

In addition, search improvements are seen as important to keep the flagship Ask Jeeves site as an attractive search destination. The site regularly draws about 11 percent of the potential web audience, according to Jupiter Media Metrix figures. Ask Jeeves has rolled out a variety of new ad products recently designed to go beyond banners, to help it monetize its search results.

The Teoma acquisition gives Ask Jeeves some impressive link analysis technology that can be integrated into the Direct Hit improvements that it already had underway. In addition, Teoma is enjoying some rising popularity as the new "hot" thing in search. Both factors offer an important boost to Ask Jeeves.

Google has been the "hot" search engine since about mid-1999. That was when it signed a deal to power some results with Netscape Search, and it shortly after dropped the "beta" moniker off its own web site. Since then, positive reviews and praise over the quality of results at Google have continued to roll in.

Google's accolades all well-deserved, because the company has maintained its exceptionally good search results while simultaneously building the largest collection of documents on the web. Google's only weakness is simply that it is no longer new. Reviewers and reporters in general are always looking for the latest new thing to write about, and Teoma's launch earlier this year stepped neatly into that gap.

Like Google, Teoma makes heavy use of link analysis to produce its results. However, Teoma's system measures links only within collections of documents deemed relevant to a particular search, rather than those on pages from across the entire web, as Google does.

Teoma has pitched this more narrow focus as meaning that it will produce better results than Google, but that spin glosses over the fact that Google has techniques that also let it focus on only relevant links. Nevertheless, the idea of Teoma somehow being better than Google has caused a variety of positive articles to appear, since I first wrote about the search engine back in July.

Teoma certainly offers potential to Ask Jeeves. It simply remains to be seen whether the company can make more use of this potential than it did with Direct Hit.

How will the integration happen? Let's review how Ask Jeeves and Direct Hit currently work, to see how they will go forward.

At the core of Ask Jeeves are human-compiled answers. There is a staff of about 20 editors that review popular queries and hand-pick sites to appear in the top results at the service. It is this human selection that gave Ask Jeeves the relevance that made it popular with users.

In contrast, Ask Jeeves is sometimes mistaken as the only major "natural language" search engine. This is because the service promoted the fact that users could enter questions in a sentence format and get relevant answers back. However, those answers were relevant because humans had been involved. In addition, you can enter natural language questions into any major search engine and get back answers. If they aren't relevant, that has more to do with the search engines not reviewing their query logs, as Ask Jeeves, does, then being unable to parse your query.

The editor count used to be over 100, by the way. Editors are expensive, so Ask Jeeves has scaled back on them. The goal now is to move forward with editors adding listings for only the most popular queries. The company recently told me that 93 percent of the questions it answers come out of only 20 percent of the knowledge base it has compiled.

In other words, Ask Jeeves argues that it doesn't need an extremely broad knowledge base to stay relevant. Instead, it needs editors to stay on top of the most pressing questions.

As backup to what the editors may miss are the listings from Direct Hit. These listings are gathered in two ways. First, Direct Hit monitors what people are clicking on in the results it provides to other sites, such as HotBot, MSN Search and Lycos. This clickstream, along with clicks at the Direct Hit site itself, are routed into a database that forms the Direct Hit search engine. Sites that attract good clicks for particular searches then rise to the top of listings.

Direct Hit also crawls the web, but it is not much of a crawler, so many pages on the web may be missed. Pages that it does find are added to the Direct Hit database. They may then become popular, if they attract clicks.

Direct Hit listings also appear beyond the Ask Jeeves site. You'll find them as the main results at the Direct Hit web site itself. In addition, they are the main listings that generally appear at HotBot. They may appear in the Lycos "Popular" section, and they come up if you select the "Top 10" link at MSN Search. Direct Hit listings are also distributed to some smaller web sites.

Just to confuse you, Ask Jeeves refers to its Direct Hit listings that are distributed to others as being from the "Jeeves Search Engine."

Before the Teoma announcement, the company had embarked on its "Hammerhead" project that intended to improve the Direct Hit results. Hammerhead is designed to increase the crawling capacity of Direct Hit. In addition, an essential component of Hammerhead is to allow for paid inclusion listings. Ask Jeeves sees this as an important new revenue source, though whether webmasters will agree that paid inclusion listings will remain to be seen.

Now enter Teoma into all of this. Teoma has some sophisticated link analysis mechanisms, but what the site has lacked is a large database. Teoma's index size is about 100 million pages. The company was already planning to improve this, and now Ask Jeeves says Teoma will be able to take advantage of the work already done in its Hammerhead project.

"We'll have Teoma farther along than they would have been themselves, with our work," Battle said.

Some of this feels like spin, however. Teoma already said it was easily scalable, so it doesn't seem like Ask Jeeves is providing it with anything technologically that is extremely helpful -- except, perhaps, for the rapid insertion of paid inclusion listings.

Of course, there's no doubt that funding and distribution from Ask Jeeves potentially means a big boost for Teoma. But this also depends on the company not making the same mistake it did after the Direct Hit acquisition, as well as Ask Jeeves surviving the current economic slowdown. Battle is positive, on that front.

"We have $ 88 million in cash. We've got money and time to make this combination to work," he said.

Ultimately, technology from the existing Direct Hit service, the Hammerhead project and Teoma should all be combined and made available in a new search engine scheduled to appear at the end of October. That new service, which will be distributed through all the Ask Jeeves web sites and partner sites, is what Ask Jeeves hopes will be the Google-killer, in terms of both relevancy and coverage.

Ask Jeeves
http://www.askjeeves.com

Teoma
http://www.teoma.com

Direct Hit
http://www.directhit.com

How Ask Jeeves Works
http://searchenginewatch.com/subscribers/askjeeves.html

Updated, this provides information on how Ask Jeeves compiles its results and, in particular, how to appear in the knowledge base.

How Direct Hit Works
http://searchenginewatch.com/subscribers/directhit.html

Updated, this explains how Direct Hit currently works and provides some overview tips on how to prepare for the Teoma integration.

Make Room For Teoma
The Search Engine Update, July 2, 2001
http://searchenginewatch.com/subscribers/articles/0107-teoma.html

Background and details about Teoma.

Ask Jeeves Announces New Models of Its Signature Ad Product
Ask Jeeves Press Release, Sept. 10, 2001
http://www.irconnect.com/askj/pages/news_releases.shtml?d=20006

The "Branded Response" program at Ask Jeeves puts image-oriented ads right within the main search results. New enhancements let advertisers add options so that users can leave email addresses or registration information from within the ads or display animation, sound and video.

Ask Jeeves Advertising Information
http://www.ask.com/docs/advertise/Advertising.asp

More information about Ask Jeeves advertising products.

LookSmart Answers To Ask Jeeves
SiliconValley.internet.com, Sept. 4, 2001
http://siliconvalley.internet.com/news/article/0,2198,3531_878141,00.html

There was a time when the meta search result at Ask Jeeves were more than ads. That's long gone. LookSmart joins players such as GoTo and About.com that are distributing their paid listings via the Ask Jeeves "meta search" area.

AskJeeves & Teoma SEC Filing
http://ragingbull.tenkwizard.com/contents.php?repo=tenk&ipage=1497435&back=2&g=

Covers the price Ask Jeeves paid for Teoma.

Wisenut, the Google Killer? Nah...
SearchDay, Sept. 5, 2001
http://searchenginewatch.com/searchday/01/sd0905-wisenut.html

Like Teoma, Wisenut has also been heralded as a scrappy underdog that's supposedly going to topple Google from its "throne" as the king of web search. Not likely, says Search Engine Watch associate editor Chris Sherman.