What happened to Ask Jeeves?

Ask Jeeves, now known as Ask.com, was a question-and-answer and search engine business that was founded in 1996 by David Warthen and Garrett Gruener.

Ask Jeeves was based on the eponymous character Jeeves, a butler named after a valet in a series of fictional books from author P. G. Wodehouse. Visitors to the site would type in a question and be directed an answer from crawler-based results, paid Google listings, or content from the Ask Jeeves editorial team. Some of the more difficult questions were sent directly to a site editor, with some paid and others volunteering their time and expertise.

All appeared well at the company after an IPO in 1999 worth $42 million and more than one million daily searches on the Ask Jeeves website. Less than seven years later, however, the Ask Jeeves brand was formally retired and the company made a belated but ultimately successful business model pivot.

Search engine wars and the dot-com bubble

Ask Jeeves existed at a time in the late 1990s and early 2000s characterized by heavy competition in the search industry. Google had formed in 1997, but there were also more established players such as AltaVista, Excite, Yahoo!, and Lycos. 

This period was characterized by numerous companies competing to secure market share in what was an exciting time of possibility on the internet. Unfortunately, this period was also characterized by intense speculation in internet-based companies that ultimately could not be sustained.

When the dot-com bubble burst, Ask Jeeves posted a $425 million loss in 2001 and teetered on the edge of bankruptcy.

Site reconfiguration

Realizing something needed to change, Gruener decided to make Ask Jeeves more of a traditional search engine and less of a question-and-answer platform. Jeeves himself was recast as something akin to a mascot rather than a provider of knowledge. 

Thanks to an ad revenue deal struck with Google, the company returned to profit in 2003. However, it’s important to note that Google Adwords had already secured 32% of the market by this point. By comparison, Ask Jeeves held a paltry 3%.

Acquisition

InterActive Corp. (IAC) acquired Ask Jeeves for $1.85 billion in 2005. At the head of IAC was Barry Diller, who purchased the platform with the belief that he could take significant market share from Google, Yahoo, and MSN. These three competitors accounted for 83% of all web searches and, thanks to lucrative advertising revenue, had access to deep talent pools and vast amounts of resources.

To better compete in the industry, Ask Jeeves made several acquisitions and invested heavily in advertising as the business model pivoted to one based on search engine traffic. Ask Jeeves became Ask.com in 2006 and any trace of Jeeves the butler was removed.

Business model pivot

Ask Jeeves was initially popular because of its user experience. Indeed, asking a butler to answer a question was a novelty at a time when the powerful search engines we take for granted today did not exist.

However, the platform ultimately failed because of the pivot from a question-and-answer platform to a search engine. Ask Jeeves effectively entered the industry at walking speed while players such as Google were already sprinting. 

To some extent, Ask Jeeves was doomed either way. As web users became accustomed to the streamlined interface and functionality of search engines, few were willing to endure the hassle of asking using Ask Jeeves when Google could deliver multiple answers in a fraction of a second.

Key takeaways:

  • Ask Jeeves, now known as Ask.com, is a question-and-answer and search engine business that was founded in 1996 by David Warthen and Garrett Gruener.
  • When the dot-com bubble burst, Ask Jeeves entered into an ad-revenue share agreement with Google. Over the following years, it progressively shifted from a question-and-answer platform to one more closely resembling a search engine.
  • Ask Jeeves was acquired by InterActive Corp. in 2005 with then-CEO Barry Diller instituting several acquisitions and a formal business model pivot to take market share from Google, Yahoo, and MSN. Ultimately, these companies had too much of a head start, and Ask Jeeves could not compete with their talent pool or resources.

Read More:

Scroll to Top
FourWeekMBA
[class^="wpforms-"]
[class^="wpforms-"]