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Ask Jeeves buys eTour assets

The search-engine company snaps up Web-related pieces of direct marketer eTour and plans to turn a profit by its fourth quarter.

Ask Jeeves said Tuesday that it has snapped up assets of direct-marketing company eTour and plans to turn a profit by its fourth quarter.

Shares were up 23 cents, or 12 percent, to $2.20 in premarket trading on the Island ECN. The stock was still off its 52-week high of $33.88.

Ask Jeeves provides a search engine that answers questions in natural language. The Emeryville, Calif.-based company caters to both consumer and corporate customers.

Ask Jeeves first answered the one question that has stumped investors since its July 1999 IPO--when will the company turn a profit?--when it reported its first-quarter results in April. Management predicted at that time that the company would reach pro forma profitability by its fourth quarter.

On Tuesday, the company said it bought certain key assets of eTour, a direct-marketing and Internet media company, for an undisclosed amount of cash. The move will help the company expand its advertising base and give site users a broader set of search results. Ask Jeeves also plans to use eTour's e-mail marketing technology for direct e-mail marketing.

It should also be a financial boon. Ask Jeeves said it expects the assets purchased to add new revenue streams to its Web Properties division, as it gains paid advertisers.

The deal is expected to add to earnings starting in the fourth quarter, helping Ask Jeeves reach its goal of pro forma profitability in that period. The company also said it expects to exit the year with more than $50 million in cash.

Included in the assets are the Web property, which has more than 4.5 million registered users and 370,000 daily unique users, according to the Jupiter Media Metrix April report; eTour's direct Web site delivery engine; a proprietary direct e-mail marketing technology with 2.2 million newsletter subscribers; and a strong advertiser base.

Ask Jeeves will continue to operate, but will integrate eTour's direct Web site delivery engine into the Ask Jeeves Web site by the fourth quarter.