May 16, 2003

Ask Jeeves announced on Friday that Google has replaced Espotting as the paid-listing provider for its UK subsidiary, giving the search leader a key distribution outlet abroad.

The two-year deal calls for Google to provide the top three listings on results page of the Ask Jeeves UK search engine, ask.co.uk, under the heading "Websites I can show you." (The listings will be labeled as sponsored.) The two companies will split the revenues generated from advertisers' paying each time a user clicks on their listings. Further financial terms of the deal were not disclosed.

Ask Jeeves said it selected Google over both Espotting and Overture Services. Espotting signed a paid-listing deal with Ask Jeeves UK 18 months ago. Both Espotting and Overture will remain in Ask Jeeves UK's meta search results, at the bottom of the page. "The strength of the search advertising market, along with the value of our search traffic, resulted in a lively competition for our UK business," said Adrian Cox, Ask Jeeves UK's chief executive. "The performance of the Google program on Ask.com, coupled with the rapid growth of the AdWords advertiser base in the UK, make Google a valuable partner."

A Google representative declined to break out the number of UK-based advertisers the company has signed. Overall, Google boasts an advertising network of 100,000. Ask Jeeves was one of a key early group of distribution partners of Google's AdWords. At the time, Google was setting out to convert its strength in algorithmic search into a rival paid-listings program to that of industry leader Overture. Google replaced Overture in the July 2002 deal, having established itself in the prior months as a serious competitor through distribution agreements with EarthLink and America Online.

Nearly a year later, Google and Overture are neck and neck in generating paid listings, with comScore's qSearch service recently estimating that Overture has a slight lead in the market. Abroad, Overture has recorded a string of distribution partner wins when pitted against Google, establishing a foothold in three European countries and two Asian countries. Overture recently launched operations in Italy and plans to open in six more offices this year. Google has relied mostly on traffic to its local sites.

Ask Jeeves has profited handsomely from the booming market for paid listings, which is projected to grow from a $2 billion industry today to $6 billion in 2007. In the first quarter, the company took in $15.3 million from paid listings, a 210 percent increase from the same period a year earlier. While Google drove much of that growth through the U.S. deal, Ask Jeeves UK recorded $4.1 million from paid placement, a 320 percent increase from the first quarter in 2002. Ask Jeeves, which is among the top search destinations in the UK, will be Google's biggest distribution partner. In addition to its own popular search site, Google has distribution deals with ISPs BT Openworld and NTL. Google launched its AdWords program in the UK in September 2002. It said the Ask Jeeves UK deal improves its reach to 63 percent of the UK's online population.

The loss of Ask Jeeves UK comes as a blow to Espotting, which counted the search site as one of its top partnerships, particularly in the face of intense competition from both Google and Overture in its home market. Espotting retains distribution deals with Yahoo! UK and UK Plus. Overture still remains the dominant force in the UK market, having inked deals with FreeServe, MSN's local site, and AOL Europe. (Overture also has a distribution agreement with BT Openworld, which offers users the option of using Google or Overture.) Overture boasts reaching 80 percent reach in the UK. Its operations there have been profitable for five straight quarters.

Source: Internet News.com

        

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