Analyst: Jeeves to sell enterprise unit

Forrester Research predicted Jeeves would sell its Jeeves Solutions unit, which provides search technology to corporations for their Web sites and internal networks, and named iPhrase Technologies and Broad Daylight as likely buyers.

Representatives for Broad Daylight and iPhrase could not immediately be reached for comment, and Jeeves, preparing to release its first-quarter results this month, is in a quiet period mandated by the Securities and Exchange Commission and declined to comment on the accuracy of the Forrester prediction.

But the Emeryville, Calif.-based search company, known for its "natural language" query system, emphasized that Forrester had not based its report on company-provided information.

"We have a large and loyal base of customers and we continue to introduce new ones," said Jeeves representative Jessica Hoffman of Jeeves Solutions. "We just introduced a new version of our product that was received very well, and we continue to operate. (The Forrester report) is clearly their opinion. They did not fact-check that with us."

The study's lead author, Forrester analyst Paul Sonderegger, acknowledged that he had not talked with Jeeves about the report but said he had confirmed it with two sources with independent knowledge of the proposed sale. The sources, executives at two different search companies, told Forrester that Ask Jeeves was "interested" in selling off its enterprise search business. One of the executives said Jeeves had retained an outside firm to shop that part of their business around, Sonderegger said.

One prominent search analyst said he didn't know Jeeves' plans firsthand, but concurred with Forrester's argument that companies will fail if they try to divide their energies and expertise between Web search and enterprise search. He pointed to Fast Search & Transfer's new focus on enterprise search as an example of a company that had reached the same conclusion.

"That is indeed a classic story," said Danny Sullivan, editor of SearchEngineWatch.com. Sullivan rattled off a list of companies that had offloaded enterprise search to focus on Web search, or the other way around, including OpenText, Lycos, Excite, InfoSeek and AltaVista.

"The skills aren't the same," Sullivan said. "There perhaps are some synergies, but it doesn't mean that you're going to be good at enterprise search if you're good at Web search, or vice versa."

The report, dated March 28, reviews the heightened activity in the enterprise search market during the past five months, including Verity's acquisition of Inktomi's enterprise search business, Yahoo's purchase of Inktomi's Web search technology and Overture's acquisition of search technology from Fast and AltaVista.

It goes on to detail the massive impact Google has had on the search market, helping force Inktomi and AltaVista out of business and inspiring fear at paid-search provider Overture and at portal giant Yahoo.

Despite the ongoing wave of activity in search, Forrester suggested that the recent consolidation was just the tip of the iceberg.

"While the enterprise search market is highly competitive, its shakeout has not yet begun, and the ultimate winners are yet to be determined," a brief of the report said.