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Ask Jeeves Inc. to Be Bought for $2 Billion

IAC/InterActiveCorp announced plans today to purchase Ask Jeeves in an all-stock transaction valued at $1.85 billion.

IAC intends to grow Ask Jeeves' search share by using its local content properties, which include Citysearch, Ticketmaster, Evite, and Match.com, as well as its Expedia travel sites, said Barry Diller, chairman of IAC.

Paid search ads will continue to be provided through Google's AdWords program through 2007, when Jeeves' existing agreement ends. Plans beyond that are not set, with Diller leaving open the possibility to renew the agreement. But Ask Jeeves CEO Steve Berkowitz strongly hinted Jeeves might have its own ad system in place by then, based on its Teoma search technology.

Diller plans to invest in marketing to get new users and rely on Ask's technology to keep them. In this way, IAC hopes to narrow the gap between Ask.com's brand recognition and its market share.

Other plans include incorporating Ask.com search results into relevant content from IAC's 40 sites in verticals such as retailing, ticketing, personals, media, financial services, real estate, and teleservices. IAC will also establish a long-term distribution relationship with its travel properties, which it plans to spin off under the Expedia brand.

The plans, announced in December, will include 13 travel-related sites -- including Expedia.com, Hotels.com, Hotwire, TravelNow.com, and TripAdvisor. The spin-off is expected to take place soon after the Ask Jeeves deal is completed.

see also new york times and clickz.com

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