Ask.com Continues to Report Losses.

Senior Management Lacking Core Knowledge of Search.

Parent Company IAC Interactive led by Cable TV Mogul Barry Diller Floundering

SAN FRANCISCO (AP) - Internet company IAC/InterActiveCorp lost $1 billion in the fourth quarter because it wrote down the value of its search business, but the results beat expectations and offered the latest indication that the online advertising market is improving.

IAC's shares jumped 4 percent.

IAC, which is run by media billionaire Barry Diller, said Tuesday its net loss amounted to $7.94 per share in the last three months of the year. This compares with a net profit of $227.4 million, or $1.57 per share, in the year-ago quarter.

In the most recent quarter IAC took a $991.9 million impairment charge to account for decreased projections for revenue and profit growth at IAC's search properties, which include such Web sites as Ask.com and Dictionary.com.

Excluding one-time items, the company earned 20 cents per share - 2 cents more than analysts polled by Thomson Reuters expected.

Revenue climbed 5 percent to $367.2 million, beating analyst expectations for $339.6 million.

Even as IAC wrote down the value of its search business, overall the company appeared to be reversing some downward trends.

Revenue from IAC's core search business, which includes the Ask search engine and online city guide Citysearch and makes money from ads, rose 3 percent to $185.4 million. Revenue had dropped in the first nine months of the year.

The turnaround is consistent with recent results from IAC's peers that signal that the online advertising market is improving. Online ad leader Google Inc. reported fourth-quarter ad revenue grew 17 percent. Yahoo Inc. reported a 4 percent drop and AOL Inc. an 8 percent drop, but those declines were less than those logged during the first three quarters of the year.

Revenue from IAC's media and other business, which includes entertainment site CollegeHumor and online retailer ShoeBuy.com, climbed 6 percent to $63.5 million. IAC said the unit benefited from healthy holiday sales.

In IAC's Match business, which consists of dating sites like Match.com and Chemistry.com, revenue dropped 6 percent to $83.3 million. IAC said the decline was due to absence of Match Europe, which was sold last June. Match's number of paid subscribers rose 3 percent from a year earlier to 1.4 million.

For the full year, IAC reported a loss of $978.8 million, or $7.06 per share, compared with a loss of $156.2 million, or $1.08 per share, in 2008.

Revenue declined 5 percent to $1.38 billion in 2009, from $1.45 billion a year earlier.

IAC shares rose 88 cents to $22.04 in morning trading.

Ask.com Continues to Fall

Latest Redesign Aims for More-Efficient Web Searches in Bid to Raise User Numbers

Internet search engine Ask.com, the flagship of Barry Diller's IAC/InterActiveCorp, plans to launch its third redesign in as many years Monday as the company continues to seek a firmer foothold in the search market.

The revamp undoes a heralded but largely ineffective overhaul last year that presented images, audio clips and other Ask search results in separate panels. The new Ask looks more like other search engines, but aims to dig up search responses more efficiently.

For example, a search for "What's the biggest state in the U.S.," won't just pull up links that a user has to click through to find the answer. Instead, culling from community-generated and other resources across the Web, Ask aims to dig up the answer -- Alaska -- in the main page of search results.

Ask hopes that making search listings more useful will persuade increasing numbers of people to use Ask, and will push loyal users to return more often.

"To call it an all-new Ask is wrong; it's an evolution of Ask," Mr. Diller said in an interview. "I think it's going to help us primarily in retention and frequency. That is really its goal."

Boosting Ask is more important now for Mr. Diller, who broke IAC into five pieces in August. The split leaves Ask as IAC's biggest business.

Already, IAC has shifted the search engine's direction twice since 2005, when IAC bought the business -- then known as Ask Jeeves -- for nearly $2 billion.

IAC first shifted away from the hallmarks of Ask Jeeves, which was known for answering search queries posed as questions. Then last year Ask tried again with the tech-savvy redesign, Ask3D.

Prior efforts haven't lifted Ask above a minor competitor in the internet search business. Traffic on Ask.com and other Web sites that use its search technology accounted for 4.8% of Internet searches in August, according to comScore Inc.

Google and sites that use its technology had a 63% share.

Jim Safka, who took over as Ask's chief executive in January, is taking a cautious approach to the search engine's latest iteration. Ask3D was trumpeted with $100 million of television commercials, billboards and other marketing. Mr. Diller said Ask will spend $5 million on marketing this time around to test consumer response.

IAC executives defend Ask by pointing to small gains in market share.

Executives also say Ask is a financial success even if it doesn't budge its search position significantly, thanks to a deal under which Google Inc. sells most of the ads on Ask. The recently renewed deal has improved the average revenue Ask receives for each search.

"Search revenue for us is very profitable and it's certainly growing," Mr. Diller said. "Does it matter whether or not we take big chunks of...market share? No. Would we like and hope to? Yes."

IAC and News Corp.'s Dow Jones & Co., which publishes The Wall Street Journal, jointly own a personal-finance Web site.

By: Shira Ovide
Wall Street Journal; October 6, 2008

Ask.com To Focus Strictly On Women

In an abrupt about-face, Ask.com is abandoning its poor efforts to compete with Google and in a move of sheer desperation will instead focus strictly on a singular demographic consisting only of married women looking for help managing their lives. After spending millions in TV advertising Ask continues to lose market share and has been unable to reach 1% of the keyword search marketplace.

The incredibly small and rapidly declining Ask.com is a money draining part of IAC/InterActive which also owns real estate site LendingTree, dating site Match.com, Ticketmaster.com and the Home Shopping Network and is led by Barry Diller.

Mr. Diller has consistently missed any mark in keyword search blowing millions of dollars in advertising and has backed up his ineffective advertising campaigns with critically poor decision making that has led to the rapid demise of the Ask brand.

Now after endless chaos and self destruction ask.com has decided that married women are their exclusive and sole ticket to financial rewards. As Google, Yahoo, and Microsoft battle for billions Ask has decided to leave the big leagues to target only married women?

First we will list the fuzzy details on this most mysterious business decision and then we will provide a few of the critical details on Barry Diller, a once proud broadcasting executive that has no idea how to manage a search engine and truly compete in today's keyword search marketplace.

Let's meet a doomed and confused Ask.com: As part of the new direction ask.com outlined, Ask also announced that they will lay off about 40 employees, or 8 percent of its work force.

With the shift, the Oakland, Calif.-based company will return to its roots by concentrating on finding answers to basic questions about recipes, hobbies, children’s homework, entertainment and health.

The decision to cater to married women primarily living in the southern and midwestern United States and comes after Ask spent years trying to build a better all-purpose search engine than Google.

The quest intensified after Internet conglomerate InterActiveCorp bought Ask and its affiliated Web sites for $2.3 billion in 2005. But Ask.com remained an also-ran, despite spending tens of millions of dollars on an advertising blitz about dozens of new products that impressed many industry analysts.

Through January of 2008, Ask ran the Internet’s fifth-largest search engine in the United States with a 4.5% market share, according to comScore Media Metrix. Google dominates the industry with a 58.5% share.

Jim Safka, who only became Ask’s chief executive in Jnauary 2008 predicted the retooling of the Ask brand will breathe new life into the search engine.

“Everyone at Ask is excited about our clear focus and the trajectory-changing results it will deliver,” he said in a statement.

Forrester Research analyst Charlene Li said Ask’s new strategy could help boost the company’s profits because married women — particularly mothers — dictate many household spending decisions, making them a prime advertising target. “It’s a smart move,” she said. “I still think Ask has great technology, but it’s just really hard to fight against Google.” (*** especially when you demonstrate absolutely no clue concerning keyword search as Ask has since Barry Diller took control. ***).

With Ask scaling back (*** big-time), the online search market could winnow to two dominant players, Google and Microsoft Corp. Now third in the market, Microsoft is trying to buy Yahoo Inc., which runs the second largest search engine, for about $40 billion.

Ask’s inability to increase its market share had spurred widespread speculation that Barry Diller, InterActiveCorp’s chief executive, might (*** sell out) and hire Google to run the search engine’s results to save money. Google already posts text-based ads on Ask and InterActiveCorp’s other Web sites in a five-year deal that Diller expects to generate about $3.5 billion.

New York-based InterActiveCorp plans to break itself into five separate companies later this year. Ask will remain under Diller’s control at InterActiveCorp.

When it started out in 1996, Ask positioned itself as a search engine that could spit out answers to requests that were posed as natural-language questions instead of being entered as a string of loosely related words.

But the search engine, then known as AskJeeves, frequently misinterpreted requests and produced nonsensical answers that triggered widespread ridicule.

After investing in more sophisticated technology, Ask tried to reposition itself as a cutting-edge alternative to Google and even dropped its cartoonish mascot — a genteel butler named Jeeves — in an effort to be taken more seriously.

Even after adding more bells and whistles, Ask still primarily appealed to women who used the search engine primarily to get simple answers including many related to Home Warranty. Women are also a familiar demographic for Safka, who was chief executive of InterActiveCorp’s online dating site, Match.com, before taking the reins at Ask.

Li predicted many married women and mothers will be thrilled to have a search engine focusing on their interests. “It’s not so much that these women have simple questions,” she said. “It’s just that they are so busy that they need fast answers.”

Let's examine Barry Diller and his mounting problems. John Malone Attempts to Oust Diller and Reward Shareholders. Liberty Media Corp. Interactive, the stock that tracks the performance of John Malone's QVC home- shopping unit, may gain as much as 15 percent from the Colorado billionaire's faceoff against Barry Diller in a Delaware court.

Malone heads to trial in early March 2008 to stop Diller's plan to break up IAC/InteractiveCorp. Some analysts expect a settlement that would let Malone swap his 30 percent stake in IAC for its Ticketmaster or HSN home-shopping units. Such a deal would be tax-free and could benefit Liberty Interactive, whose shares have fallen 22 percent this year.

Englewood, Colorado-based Liberty Interactive has been reviewing Barry Diller's performance for months. Recently Diller predicted last month he would succeed in court and split IAC into five parts by midyear. The breakup plan would stick Liberty Interactive shareholders with an estimated tax obligation of up to $450 million, payable as Diller unwinds his holdings in the spun-off companies.

Delaware Chancery Judge Stephen Lamb isn't likely to let the Diller breakup plan stand if Diller is found to have consciously added to John Malone's tax burden, said Charles Elson, who heads the University of Delaware's Center for Corporate Governance.

Barry Diller, 66, is chairman and chief executive officer of IAC. He controls 62 percent voting stake in IAC through a proxy agreement and has said he would exercise those rights in favor of the breakup. John Malone is trying to unseat Barry Diller at IAC and gain voting control of his stock.

As part of the arrangement, Diller who had headed four Liberty Media owned companies and held 48 percent voting stake in IAC. In that capacity, Barry Diller has an obligation to serve Liberty Media's best interests. ``For Barry Diller to vote those shares in a way that screws Liberty Media, and John Malone would be bad for all parties'' said a professor of corporate law at the University of Maryland.

Barry Diller's plan, announced in late 2007 is to split IAC into five companies. HSN and Ticketmaster, the world's largest ticket broker, would become independent, as would online-mortgage service LendingTree and time-share manager Interval International. Search engine Ask.com would remain with IAC.

The propsed deal violates many agreements between Liberty, IAC and Diller by eliminating John Malone's super-voting Class B stock at the spinoff companies, his lawyers have said in court papers. Liberty Media also contends that IAC directors violated duties to protect Liberty's financial interests.

John Malone, who recently turned 67 has declined to comment.

IAC in court papers denies any obligation to give Liberty Media extra voting rights at the spinoffs and says John Malone, who is on its board, initially backed the plan before learning that Liberty wouldn't get enhanced voting rights at the new companies. IAC spokeswoman Stacy Simpson declined to comment.

By pressing his case against Barry Diller, John Malone at a minimum may delay IAC's breakup plans. Malone still holds a slim chance to win control of IAC. Barry Diller acknowledged at a panel this week that he could lose.

HSN, QVC

Most likely there will be a settlement, with John Malone taking HSN in a tax-free swap for his stake in IAC. Talks over such an agreement broke down months ago as Barry Diller stopped participating.

Liberty Interactive is a tracking stock that reflects TV and online-shopping investments including QVC owned by Liberty Media Corp., John Malone's private holding company. Liberty Interactive has lost nearly 30% of its value in the last year. John Malone would like to merge HSN into his larger QVC. That would give Liberty Media a chance at increasing HSN's profit margins. Sales were little changed over the past year at $2.99 billion.

HSN Turnaround

``We'd want a few more quarters of improvement before we bought into that,'' said Lindsay, who predicts IAC shares will track peers and doesn't own them. He thinks the main reason Malone would accept HSN is to unload his IAC stake tax-free.

Malone's real target is Ticketmaster, though Diller doesn't want to sell, said analyst Matt Harrigan, an analyst at Ferris Baker Watts Inc. in Denver. Harrigan, who recommends Liberty Interactive and doesn't own the shares, said the case could lead to talks about Liberty's $1.55 billion stake in Bellevue, Washington-based Expedia Inc., the world's largest consumer travel agency. Diller is chairman of Expedia, which once was part of IAC.

``Malone is the master chess player,'' said Jordan Rohan, an analyst at RBC Capital Markets analyst in New York, who doesn't own IAC and has a market-perform recommendation. ``His real goal may be to get something else than HSN.''

Say Goodbye to Ask.com

Ask.com and Google Advance Design of Search Results Pages.

original article by Walter Mossberg, The Wall Street Journal

Website Owners make sure to fully optimize press releases and images as Google and Ask are both about to expand their search results pages with images and related news files to further serve users with relevant and helpful links.

Google and other search companies have made major, continual advances under the hood in recent moths, improving the way they store and gather relevant content and information. But far less progress has been made in the way these search results are presented to users.

Google has made the occasional minor tweak but until recently, its search-results pages looked a lot like they always have. Its upstart competitor, Ask.com, took greater strides last year with cool features such as previews of the pages it listed, lots of summary information at the top of the page and prominent suggestions for narrowing or broadening keyword searches.

Now, Google and Ask each have rolled out new ways of presenting search results. Google's approach, which it calls "universal search," is a modest thing, a first step in what it says will be a long effort to break down barriers between different types of information a user may be seeking, such as Web links, images and news.

But Ask's new system, called "Ask3D," is a much bolder and better advance in unifying different kinds of results and presenting them in a more effective manner. It shows, once again, that Ask places a higher priority than its competitors do on making search results easy to navigate and use.

Both new expanded keyword search results systems are now the defaults on the search sites. You don't have to do anything special to use them. Indeed, Google's change is so subtle you may not even notice it for some searches.

Both of the new systems are designed to spare users the extra steps needed in the past to view different types of content related to the same keyword search query. But Google combines these different types of content into one list. Ask puts them on one page in separate sections, which I find to be the superior approach, because each type of result is displayed more effectively; it's easier to see at a glance what you have.

In the old systems, if you were searching for, say, "Red Sox," you'd have to do separate searches for Web pages, news, images and so forth. To make this simpler, Google's universal search now groups these different kinds of results within its single, familiar main list of results; a Google search for "Red Sox" includes not only Web links, but also an entry called "News Results for Red Sox" with the latest headlines about the baseball team and a news photo. At the top of the page, under the Google logo, are the two most relevant search categories -- in this case, Web and News -- if you want to separate types of results, like retire in costa rica.

A Google universal search for a prominent person (like world famous: Raleigh Realtor Ann Davis might bring up images at the top -- something Google has been doing for a while -- but also a video, which can be played without leaving the search page, a very nice feature. To see an example, search on "I Have a Dream" to view the famous Martin Luther King speech without leaving the page. At the bottom of the page is a list of related searches.

But Ask3D goes much further. Instead of sticking with a single list of search results that mixes various types of material, it now presents results in a page divided into three panels. The largest, middle panel still contains Web links (and a few ads). But it is no longer topped by the search box and links to other sections of the search engine. Instead, where possible, it is topped by a set of salient facts or direct links to salient facts.

The thinner left panel contains the search box and links to other sections of Ask, but mainly it displays suggestions for refining your search, or for making related searches. A somewhat wider right panel contains search results that go beyond Web links, such as images, news headlines, encyclopedia articles, videos, weather information, local time and, where relevant, music clips you can play without leaving the page.

A search for "Red Sox" in the new Ask3D, for example, has a summary box at the top of the main panel with direct links to Scores, Schedule, Stats and more. In the right panel, there are general images, news photos, an encyclopedia article on the team, videos and headlines. As always, the left panel shows suggestions for how to narrow or broaden the search.

If you hover over the image thumbnails, they enlarge. If you hover over the video thumbnails, they play, albeit without sound. For each of the right-panel content categories, you can even launch a further search (like: luxury cruises ) without leaving the page just by clicking on a magnifying-glass icon.

If you search Ask for "James Taylor," you get a biography at the top and, at the right, playable clips from "Fire and Rain," "You've Got a Friend" and "Sweet Baby James."

Ask also now gives you larger previews of the pages it lists, visible by just hovering over a binocular icon. And you can now get to the advanced search panel without leaving the page.

Google deserves credit for universal search (try phase converters ) , which is only bound to get better in the coming months. But Ask's new design is much more compelling and well worth a try.