Ask Jeeves flogs enterprise search biz
Taps bond market for $100m
Ask Jeeves has done a reverse FAST by flogging its enterprise search business. It will concentrate on its consumer business and is raising $100m in convertible notes to fund expansion.
Jeeves Solutions' new owner is Kanisa Inc, a California developer of customer service software. It is stumping up $4.5m in cash and loan notes for 41 staff, 40 customers and Jeeves One technology. Jeeves Solutions saw sales tumble last year to $15.4m, 55 per cent down on 2001 ($34.4m).
But sales are chugging along nicely on the consumer side. For Q2, Ask Jeeves now expects revenues of $23.5m and a pro forma profit of $0.07 per share from continuing operations, up from previous guidance of revenues of $22.5m and 0.05 per share.
For 2003, Ask Jeeves forecasts revenues of $94 million and a pro forma profit of $0.26 per share from continuing operations. Previously it expected revenues of $92 million and a pro forma profit of $.25 per share from continuing operations. The company notes that sales on continuing operations for the year will be 45 per cent higher than 2002.
Ask Jeeves claims 25 per cent reach of all searchers in North America and second place in the US "pure search" market, presumably behind Google. The company sweetened the news of its cash raising exercise yesterday with an improved performance update, on the back of a big upswing in advertising.
Presumably, Google Adwords, in operation on Ask Jeeves' US sites for nine months now, has had a big part to play, so the company's biggest competitor could also be its biggest sales house. Ask Jeeves loves Google Adwords so much that this month it ditched Espotting, Europe's biggest provider of paid-for search listings, in favour of Google for its UK site.
The search engine sector is undergoing massive reshaping: in February, FAST (Fast Search and Transfer) sold its consumer search business to Overture, the world's biggest paid-for search listing firm, for $70m cash upfront, with a performance bonus of up to $30m available. In the same month, Overture bought AltaVista for $140m in paper and cash.
In December 2002, Yahoo! announced the $235m cash purchase of Inktomi, the former high-flying search engine firm. The previous month, Inktomi tidied itself up for sale by selling its enterprise search business to Verity for $25m. ®