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its relationship with Google as a provider of sponsored advertising links on
Ask Jeeves' global search and portal brands through 2007. The extension renews
the agreements with the Company's flagship sites, Ask Jeeves (Ask.com) and Ask
Jeeves UK (Ask.co.uk). Google's sponsored links product complements Ask
Jeeves' own suite of advertising products, including its proprietary paid
listings product and branded ad units.
The money. By all acounts the deal is very nice for them, with the lineball share going to Ask Jeeves. This is a no-cost option for Ask Jeeves. No sales, no customer support, minimal technical issues. A great deal for them.
This is also important for Google - it provides them with some nice positive news pre-IPO and secures one of the revenue streams for them.
They don't really do a strong job of promoting Google.
For AJ, it is all about building traffic - this is what they have been focusing on for the past 18 months or so.
To build their own PPC program, the costs would be quite high. And the uptake of advertisers would be slower.
The other thing, is how many advertisers do Adwords so they can appear in Ask Jeeves? I would suggest it would not be that many as most people would do Adwords to get into Google. This would increase the average click price - something that an AJ owned and operated program would not have initially.
Just my thoughts.
I had thought along similar lines when they have a lot of $$s in the bank. But if you look at where they have spent this money, it is to increase their reach and services to get more traffic. i.e. email, desktop search, a portal.
So now, I don't think this is going to happen. I would expect to see them grow market share (search wise) and try to capatilse on this.
This properties will show the Teoma search results. With Ask Jeeves ceasing paid inclusion this won't improve revenue, but rather is a branding exercise.
However, along with showing Teoma results, Adwords will be shown. This is where the additional revenue will come for Ask Jeeves. It won't be new revenue to the industry - as in new people clicking on results who previously wouldn't have - but rather new revenue for Ask Jeeves because previously someone else was collecting the share on the CPC. So a redistribution of revenue if you prefer to Ask Jeeves.
Bottomline is that AJ needs more market share. At this point, their focus is porbably on making the money they need to do that and on improving their results to capture the loyalty of the new visitors they put themselves in front of.
By accquiring market share now, they can always develop their own PPC program later. But spending the resources to develop a PPC program now won't do them a lick of good if they can't spend the money they need to increase their market share and searcher loyalty.
Seems the "why" question was asked of Scott Garell [clickz.com] and he replied:
It's a great partnership. Our volume drives more people into their network, and we think it's better to be building our site around the user experience, so that when people come, they're getting what we consider to be a better and different experience. It's good for advertisers and good for users.