Jeeves Looks To Answer Competition

(AP)  Underdog online search engine Ask Jeeves Inc. has bought Bloglines, a Web log index and Internet news funnel popular with serious readers of online journals, in its latest bid to gain ground on heavyweight rivals Google Inc. and Yahoo Inc.

Oakland-based Ask Jeeves completed the acquisition last week, but announced it Tuesday, though many of the online sites tracked by Bloglines spent the weekend debating the pros and cons of the combination. Ask Jeeves officials said the sales price won't be disclosed.

The acquisition stems from a widening interest in Web logs, or "blogs" — a term used to describe the online journals that have morphed from mundane personal diaries into increasingly influential hubs of news and commentary.

Redwood City-based Bloglines, formed in 2003, has established itself as an important player in the field with a searchable index of nearly 285 million articles posted on blogs.

Bloglines offers another advantage: it's a leader in "Really Simple Syndication," or RSS — a system that plucks fresh information from designated sites and then distributes the summaries and links to the user.

Ask Jeeves plans to maintain Bloglines' service and brand, and keep the startup's founder, Mark Fletcher.

Much of Bloglines' technology will be melded into Ask Jeeves' existing network of Web sites, which include Ask.com, iWon.com, Excite.com and Myway.com.

"Everyone has been licking their chops, waiting to get their hands on (Bloglines)," said Jim Lanzone, Ask Jeeves' senior vice president of search properties.

Ask Jeeves is counting on Bloglines to become a significant drawing card. The company has been trying to lure traffic from the Internet's search engine leaders, Google and Yahoo, as well as two of the Web's other biggest drawing cards, Microsoft Corp.'s MSN.com and Time Warner Inc.'s AOL.com.

Google expanded into blogging two years ago with the acquisition of Blogger, which primarily provides publishing tools. Bloglines appeals mostly to blog readers — a distinction "that definitely gives (Ask Jeeves) a first mover advantage," said search industry analyst Gary Stein of Jupiter Research. "They will get a lot of credibility from this deal."

As it bounced back from the dot-com bust, Ask Jeeves has rolled out one product improvement after another, only to be overshadowed by the search engine industry's leaders. Through November, Ask Jeeves ranked as the fifth-largest Internet search engine, with a 5.5 percent share — far behind first-place Google's 34.4 percent share and second-place Yahoo's 31.8 percent share, according to comScore Networks, a research firm.

The quest for more traffic motivated Ask Jeeves' to buy iWon, Excite, Myway and several other related Web sites for $395 million last year.

More than bragging rights are at stake for Ask Jeeves. Search engines have become big money makers because of the text-based advertising links that appear alongside the main search results. Businesses pay commissions when their ad links are clicked, so search engine profits generally rise when Web site traffic increases.

While Ask Jeeves' profits have improved, the company's earnings growth hasn't been keeping pace with Google's and Yahoo's — a factor that has hurt its standing with investors. Google's stock has more than doubled since its initial public offering last summer while Yahoo's has climbed by more than 20 percent. Ask Jeeves' stock has dropped by 6 percent during the same time.