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3/4/2003
02:07 PM
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Don't Ask Jeeves Anymore

The company bows out of the competitive enterprise search market.

It seems Ask Jeeves Inc. has decided that enterprise search isn't a market it wants to tackle after all. The company behind the popular Ask.com natural-language Web-search engine is selling its enterprise search unit, Jeeves Solutions, to Kanisa Inc., a maker of customer-service applications, for $4.25 million in cash.

The deal highlights the fiercely competitive market for providing search technology to business customers. Jeeves Solutions, launched in early 2002, was simply unable to establish a solid footprint, analysts say. "They didn't have a truly competitive product," says Jupiter Research analyst Matthew Berk, calling the unit's technology inferior to natural-language competitors iPhrase and InQuira. Berk says Ask Jeeves will be better off focusing on its Web-search technology, which it delivers through two properties--Teoma.com and Ask.com. "That's the dog, and the tail was the enterprise group."

Meta Group analyst Tim Hickernell agreed in a research note on the transaction, calling Ask Jeeves the "real winner" in the deal. Hickernell wrote that Ask Jeeves immediately becomes a more attractive acquisition target for companies such as AOL Time Warner, Microsoft, and Yahoo, which may want to compete with the two giants of Web search, Google and Overture Services.

But Ben Kaplan, VP of marketing for Kanisa, argues that the Jeeves Solutions technology was a great deal at the agreed-upon price and that adding an enterprise-grade search application to its suite of tools for resolving customer-support problems will help Kanisa broaden its market share. The company, which is best known for software that taps a company's knowledge-management infrastructure in support of customer service, boasts customers such as Apple Computer, Ford, Microsoft, and Nike. It intends to sell the Jeeves Solutions technology as a component of an offering for customer-facing support sites, Kaplan says.

Privately held Kanisa, founded in 1997 and a recipient of $50 million in venture funding, plans to retain nearly all of the more than 25 employees who were working in the Jeeves Solutions unit.

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