Ask Jeeves Starts Search Ad System

NEW YORK Ask Jeeves said it would begin a pay-per-click search advertising system that it hopes will deepen its relationship with advertisers.

Ask Jeeves, the Oakland, Calif., search engine that last month became part of IAC, said it would start taking its own search advertising listings this month through a Google-like PPC auction that will place Ask Jeeves advertisers in the top three listings on its search results pages. Ask Jeeves is keeping its ad distribution deal with Google, which runs through August 2007, with those listings filling in the rest of the ad slots on search results pages.

“We have no intention of changing it,” said Paul Gardi, executive vice president and general manager of IAC’s newly formed advertising solutions unit, of the Google partnership. “We needed to do this because we just weren’t servicing our advertisers correctly.”

Google accounted for about 70 percent of Ask Jeeves’ revenue in 2004. Ask Jeeves sold some of its own search listings through a sales team, but Gardi said it hopes the automated system will expand its advertiser relationships beyond the less than 500 it currently has.

The Ask Jeeves PPC system will show its ads based on the amount bid and their click-through rate. Ask Jeeves plans to set a 5 cents mininum bid, but it will set a higher minimum price in popular categories.

The platform was built on top of a third-party’s system, which the company declined to name but search-advertising executives identified LookSmart’s. The Ask Jeeves ad listings will appear on its other search properties, which include portals iWon and MyWay, and distribution partners like Search.com and InfoSpace.

The Ask Jeeves PPC system has similar parameters as Google’s, which Ask Jeeves hopes will make it easy for advertisers to transfer their listings to the new system.

IAC two weeks ago closed its $1.9 billion acquisition of Ask Jeeves, which is meant to tie together IAC’s stable of e-commerce sites. As a first, IAC has added Ask Jeeves search boxes to Ticketmaster, Evite and Match.com, with more integration planned for other IAC properties, which include Expedia, Hotwire and CitySearch.

Ask Jeeves remains a decidedly second-tier search engine, with its search properties drawing just 6 percent of searches, according to ComScore Media Metrix. A further hurdle for Jeeves is the low frequency of searches. A recent study by Compete, a consumer research firm, found that the typical Ask Jeeves visitor searches just twice a month compared to six times for Google visitors.