Danny Sullivan Asks Barry Diller

What’s up with the company formerly known as Ask Jeeves? Danny Sullivan spoke with head-honcho Barry Diller at Search Engine Strategies earlier this month to find out.

A special report from the Search Engine Strategies conference, February 27 – March 2, 2006, New York, NY.

Whither Ask.com? A Mogul Speaks

Let’s hope it isn’t too telling for the American economy that Stanley Bing’s latest book traces the history of the “mogul” back to the Roman Empire. If you’re Barry Diller, this Rise and Fall motif would seem not to be a concern; even if you are guilty of riding a wave or two to the top, things seem to go more smoothly when the wave crests if you’re widely diversified and if you remember to take big heaps of cash off the table from time to time.

Diller’s IAC/Interactive Corp. acquired Ask Jeeves this year, and at Diller’s behest, has shortened the name to Ask.com while jettisoning its iconic butler character. Given that Diller has been Chairman and CEO of both Paramount Pictures and Fox, Inc. (before really getting warmed up after leaving Fox to acquire QVC and a string of name brand Internet properties like CitySearch, LendingTree, Match.com, Hotwire and many more), the acquisition of Ask seems to be in line with IAC’s growth path and Diller’s investing style, on three counts: diversification, integration, and fascination.

IAC’s present model is that of an interactive-focused holding company: it’s all about dominating or at least enjoying favored status in a wide variety of verticals. Forget domination in search: that’s not going to happen. Still, even a fourth or fifth place search property offers IAC the ability to integrate more of its business around the search metaphor, perhaps becoming a little less like a holding company and more of an integrated online network. Finally, it’s clear that search is at the core of what fascinates Diller about the interactive environment. Owning a variety of properties that rely on or are deeply intertwined with search was just too tantalizing for Diller and his execs, it seems. Why not get directly involved in search in its purest form?

So in the keynote session at Search Engine Strategies New York, hosted as always by Danny Sullivan, Ask.com’s very own mogul took time out to share his take on this latest acquisition with a packed house of conference attendees. Diller’s comments were met with frequent applause and laughter. Underdogs are always beloved, especially when they cut as rakish a figure as Diller (described as “hot” by one unnamable suspect encountered by this reporter in the Speaker Ready Room).

So why dump the butler? Sullivan’s first question didn’t catch Diller unaware, and he wasted little time in dispatching it. Jeeves was “baggage, that niched or segregated us.” When you’re trying to catch a wave, or tap into a long-term growth trend, Diller seemed to argue, you would rather be named IBM than “Ace Transistors” or “GitRDone.com”. Point taken.

Diller explained that he needed to know the answer to two questions about the Ask.com technology before acquiring it and trying to grow the company. “First: is it good? Second: Is it differentiated? If not, it has no reason for being.”

Funny he should say that. Here at home the focus group gave a recent Jeeves TV spot (the one that refers to previous generations of search technology as being ‘primitive’ – using all the cleverness the ad agency could muster – monkeys hopping around!) the thumbs-down for sheer banality. Then, my wife said, as most viewers will: “Why would I use it? What features does it have that Google doesn’t have?” That uncomplicated exchange cut to the heart of the debate. Hey, I’m in the search marketing business, so I’m supposed to study this stuff, and I didn’t have an answer. Moreover, I’m not particularly motivated to find out. (Not so for some more diligent members of the research community—Gary Price for example. Gary recently accepted a position with Ask.com as Director of Online Information Resources.)

While it might be unfair in the context of a rapidly improving product to ask specifically “how is this significantly better than what Google offers in the news or maps category?,” that’s what users are indeed asking. If they don’t get an answer quickly, they won’t change their habits—a fact that Diller acknowledged several times in the keynote conversation.

So Diller, while quite hard-headed in admitting that Ask.com must offer “a real alternative” to the leading search engines, has quite a challenge ahead of him in seeing to it that he finds a team to build just such an alternative. A couple of obscure, slightly cooler features won’t be the key to growth.

Disingenuously, Diller added that “it doesn’t matter if we’re 6% or 2% market share, as long as we’re relevant.”

Sullivan asked whether he saw Yahoo or MSN to be the “non-Google competitor” that they’d like to set their sights on and eventually surpass. Diller spoke highly of Yahoo, but noted that it only brought its own search in recently, which suggests that the race to provide more relevant search is still in its infancy. He was dismissive of MSN at one point, alluding to the creepy “fat butterfly” TV spots that did little to heighten MSN’s appeal. Diller sidestepped Sullivan’s followup question about IAC’s iWon property, leading one to suspect that he harbors private doubts about the lowbrow giveaway-driven portal.

Part two of this article is Ask.com’s New Motto: Be Evil?.

Andrew Goodman is the founder and principal of Page Zero Media and author of Winning Results with Google AdWords.

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