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Licensing deal validates Ask Jeeves's approach

The search engine signs a marketing deal with one of Hollywood's biggest agents, validating the company's clever marketing as well as its low-tech approach to helping users surf the Web.

Ask Jeeves signed a marketing deal with one of Hollywood's biggest agents, validating the company's clever marketing and perhaps also its low-tech approach to helping users surf the Web.

The Emeryville, California-based search engine, which has taken as its mascot the cartoon figure of a well-manicured butler, yesterday won a significant endorsement from leading Hollywood agent Michael Ovitz's Lynx Technology Group. Lynx, as well as Ovitz's Artists Management Group, will represent the Internet character in licensing, merchandising, and programming deals, the two companies said. Terms of the agreement were not disclosed.

The company's stock price climbed 6 points to 81.06, near its all-time high. Something of an Internet darling, Ask Jeeves jumped nearly fivefold to 54.25 in its first day of trading July 1 before descending below 30 and then climbing back again in recent weeks.

Ask Jeeves's recovery comes as companies are straining to make the Net more friendly to consumers, and as competition turns more on traditional business strategies such as marketing than on technological advantages. Billed as a "natural language" search engine, Ask Jeeves relies primarily on people to sift through the data that becomes search results.

By contrast, many other Internet companies are hoping to rely on "intelligent agents," technology that uses high-level artificial intelligence to mimic human thought to make surfing the Web more intuitive.

Ask Jeeves has applied for only one patent, on its Grammar Template Query System. According to Securities and Exchange Commission filings, the company does not expect a material impact on its business if the U.S. Patent and Trademark Office rejects the application.

"They really are a bunch of people doing the grunt work to make it easier to navigate the Web," said Danny Sullivan, editor of SearchEngineWatch.com, an online newsletter. "Their secret weapon isn't technology. It's human beings."

Added Cormac Foster, an analyst at market research firm Jupiter Communications, "The answer is more in the interface, and not from another guy coming out of Stanford who has a better algorithm."

Ask Jeeves's business model is twofold. It provides search results for questions asked by non-Web-savvy Web users, such as: "Where do I find the cheapest airfares?" And it allows companies such as Microsoft and Dell Computer to incorporate Ask Jeeves's search service into customer and product support areas on their sites.

Rival Inktomi also licenses its search technology, to Web portals such as Yahoo and America Online.

Ask Jeeves isn't the only Web search service that has embraced a low-tech solution. Yahoo's search directories are compiled by people. Netscape has recruited its own volunteer army of Web editors through its Open Directory initiative. And Answers.com, a natural-language research engine created by Bill Gross in 1996, refers questions from its site for a fee to experts who provide the answers.

Ask Jeeves has arguably taken its consumer approach the furthest, however, by personifying the service through the character of Jeeves, the butler created by the British novelist P.G. Wodehouse.

"He can go anywhere. That kind of character has been consistent through television and the movies," Ovitz told Reuters. "They're very likable, very efficient, good to poke fun at, but very good at giving you answers."

Ask Jeeves Monday posted a deepening loss for its third quarter but said revenues grew sharply to $6.5 million from $113,000 the year before. Its corporate service handled 2.5 million questions in the period, while the consumer service answered 134 million questions. But company executives and analysts predict it will generate most of its revenue through partnerships with corporate Web sites.

That would allow Ask Jeeves to hone in on certain results, an easier proposition than trying to organize the Web as a whole, according to analysts. Questions remain about how effective the service is in providing accurate answers to a wide range of questions.

But Ted Briscoe, executive vice president at Ask Jeeves, said the more users ask questions, the more relevant its responses will be. "We want to position the service as a truly reliable source to answer questions," he said.