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Ask Jeeves sheds enterprise unit

Software provider Kanisa picks up Jeeves Solutions' corporate search technology and customer accounts in a deal that marks further consolidation in the search industry.

Web navigation company Ask Jeeves is selling its enterprise software unit for about $4.25 million in cash, a sign of further consolidation in the growing search industry.

The Emeryville, Calif.-based company said Wednesday that it will sell its Jeeves Solution unit, which provides search technology to corporations for their Web sites and internal networks, to Kanisa, a provider of customer service software. Kanisa will pay $3.5 million upon closing of the sale, which is expected in July, and another $750,000 in promissory notes, due to be paid within a year.

The Cupertino, Calif. company plans to incorporate Jeeves Solution's analytics technology into its customer service solutions for corporate customers. Under the deal, it acquires roughly 40 corporate accounts from Ask Jeeves.

Shedding the division allows Ask Jeeves to concentrate on its recently updated Web search technology and site, a move predicted by analysts.

"Ask Jeeves will now be in a position to focus entirely on pursuing the high-growth Web-wide search market," Skip Battle, CEO of Ask Jeeves, said in a statement.

The deal comes at a time when many Internet companies are jockeying for dominance in the Web search industry, which Google has come to dominate. Earlier this year, Yahoo bought search technology company Inktomi, and commercial search company Overture Services purchased the Web search software of AltaVista and Fast Search & Transfer.

In the announcement, the company also said that it is raising earnings guidance for the quarter and the year based on growth in its Web search business. For the second quarter, it expects revenue of $23.5 million and a profit of 7 cents per share from continuing operations. Earlier in 2003, Ask Jeeves predicted revenue of $22.5 million and a profit of 5 cents from continuing operations for the quarter.

For the year, it expects sales of $94 million and a profit of 26 cents a share from continuing operations. It had been expecting revenue of $92 million and a profit from continuing operations of 25 cents.