Ask Jeeves Acquires Teoma

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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.

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.

A longer, more detailed version of this article is
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Ask Jeeves


Direct Hit

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