Does Have a Chance?

The search site formerly associated with the well dressed subservient man has been in the news quite a bit lately. Enhanced technology designed to create a better search experience along with powerful media initiatives and a standalone paid search offering have created quite a buzz in the search sector.

Ask launched a redesigned site in late February 2006 and has high hopes for its paid search platform. Yet, an executive departure in the form of head honcho Steve Berkowitz moving to MSN and yesterday's announcement of parent company IAC revenue dropping 32 percent over last year have spurred a few important questions about the future of

Does Ask have what it takes to compete in the search world? What effect, if any, will media awareness initiatives have on the search site's potential to survive? Will the evolution of search technologies accommodate second-tier search growth?

Share the search
While it's true that IAC revenues have fallen, it's not necessarily due to the search site's inability to generate the long green. IAC has quite a bit of interactive real estate including long time earners Ticketmaster and Home Shopping Network. The latter is suffering from a weak demand for home, and health and beauty products, according to Bloomberg news.

Meanwhile, back on the search front, Ask's re-launch of a more query-friendly platform was marred by Berkowitz's recent departure to Microsoft. This is either a case of really bad timing or a big red flag for Ask hopefuls. IAC quickly announced Berkowitz's replacement, Jim Lanzone, as the chief executive, but analysts had already taken a few shots at Ask.

The silver lining on the few looming dark clouds over Ask is the new clean interface accompanied by multiple easy-to-use tools like maps and local information-- two areas that have yet shown any real monetization potential in the search world.

Big search, little share
If history has taught us anything, ad initiatives have a marginal effect on growing a search business. MSN's highly publicized campaigns in 2005 had little effect on increasing its user base. In fact, comScore's qSearch comparison of March 2005 to 2006 data indicated that every search site lost search share to Google, except Ask.

Yahoo! lost about two percent of search while MSN and AOL lost about three percent and just over one percent respectively., however, showed an increase of .4 percent of searches while Google increased six percent and still holds sway over 42 percent of search activity.

Ask's increase in share of search might be attributed to the new launch and it might not. While the top two search sites are battling for double-digit percentages of search share, Ask moving to the high end of five percent from the low end is a big deal.

Growth and retention
The online market research firm Compete, Inc has a few theories about Ask's ability to attract searchers and more importantly, keep them coming back. Consistent with other analyst-provided data, Compete also indicated that Ask's share of the market is on the rise.

From January to March 2006, the overall share of search went from 4.33 percent in January to 4.45 percent in March according to Compete's analysis. The real proof is in the retention value.

"The critical component of their performance is only uncovered when market share is analyzed in conjunction with loyalty," says Greg Saks, senior associate. Compete's monthly loyalty score tells quite a different story. January 2006 indicated 23.1 percent return visitors while March fell to 20.2 percent.

"The drop from 22.8 percent in February to 20.2 percent in March is very significant," says Saks. "This means that among consumers who used at least once in March, they only used it 20 percent of the time (versus 23 percent of the time in February). To put this into context, a two percentage point increase in the loyalty score for represents a 10 percent growth in sponsored search revenue for the engine."

Give them a reason
Media and awareness initiatives are one thing; giving searchers a reason to come back and keep using the site is something else entirely. Google has been successful for a variety of reasons, not the least of which was timing.

Google got to the marketplace early on, but the near future of search will allow any search provider that can capture search activity and deliver clean, relevant results a shot at the big time.

As search results become more and more cluttered with merchant, intermittent and not necessarily relevant local results, the clean-cut search results value proposition will fade, creating more opportunities for second-tier providers. So go ahead and Ask for better results-- time is on your side, butler or no butler.