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Ask Jeeves plunges 61 percent after warning

The online search company sees its market value sliced 61 percent after a revenue warning and news that its chief executive will step down.

Ask Jeeves saw its market value sliced 61 percent Friday after a revenue warning and news that its chief executive will step down.

Analysts downgraded the online search company's stock because of the fourth-quarter shortfall and anticipated problems in rebuilding management.

Shares were down $5.88 to $3.81 by the 1 p.m. PST close of regular trading. Earlier in the day, the stock hit a new 52-week low of $3.25.

The company said after the bell Thursday that it will post a wider-than-expected loss in its fourth quarter, and CEO Rob Wrubel is stepping down.

Analyst Safa Rashtchy at U.S. Bancorp Piper Jaffray downgraded the stock to "neutral" from "buy." Robertson Stephens analyst Lowell Singer lowered his rating from "buy" to "market performer" and suspended 2001 and 2002 estimates, awaiting better clues to the company's momentum.

Ask Jeeves said that it expects to report fourth-quarter revenue of about $25 million, well below Singer's estimate of $36 million. The company sees a loss of 50 cents a share, also far short of Singer's estimated loss of 33 cents a share.

Singer blamed a soft marketing environment for Ask Jeeves' shortfall and said other Internet companies that rely heavily on Internet marketing could face pressure through the second quarter of 2001.

"We believe that it could take some time for Ask Jeeves to rebuild its management team," Singer added.

Analyst Mandana Hormozi at Lazard Freres downgraded the stock to "hold" from "outperform" just a month after initiating bullish coverage on the company.