Business

If you want to buy Jeeves just ask: Diller

With the Google juggernaut showing no signs of slowing down, media mogul Barry Diller is now giving serious thought to getting out of the search business.

Diller, the chief executive of IAC/InterActiveCorp., admitted the search space is “challenging” and signaled he is open to selling Ask.com, the company’s fourth-ranked search engine behind Google, Yahoo! and Microsoft’s Bing.

“We have been asked a lot whether we are open to consolidating transactions in the area of search,” he said yesterday during a conference call to discuss IAC’s third-quarter results. “The answer is yes. And it is unlikely that we’d be the consolidator.”

Investors have been concerned about Ask’s ability to compete in the space. Despite innovations in search and spending millions on marketing, Ask’s share is stagnant at just over 2 percent of the US search market, according to Hitwise.

Consolidation is already underway in online search. After much back-and-forth, Yahoo! finally agreed to farm out its search business to Microsoft.

Microsoft has also struggled to make inroads against Google and decided a deal with Yahoo! was the easiest way to grab market share. Analysts said Microsoft could pick up another piece of the search pie with Ask.

“The clearest logical buyer would be Microsoft,” said Colin Gillis, an Internet analyst at Brigantine Advisors. “It could pick up a few more percentage points.”

The situation could get tricky, however. Ask uses its own search engine to power results, but relies on Google to supply ads and a big chunk of Ask’s revenue. The two companies renewed their search pact a couple of years ago, at a time when Google was cutting generous deals to win business. Brigantine’s Gillis estimates that Ask gets 89 percent of the revenue from the deal.