Gary Price blogged at SEW Blog Ask Jeeves: Barry Diller Ponders Leaving Google Ad Network (http://blog.searchenginewatch.com/blog/050707-193257).

Basically, none of the analysts think that Diller will drop Google and compete. They do believe its more about Diller being able to negotiate a better rate with Google when the contract ends.

But can they compete? Would they dare?

I think the implications of the IAC split need to be taken into account too. Ask is going to end up in IAC and portals like Expedia, Hotwire, and Hotels.com are going to be in the Expedia portion of the split that means financially, it will not be in the large portals best financial interest to support Ask with their traffic.

I have also read a number of articles where Mr. Diller has suggested that Ask search boxes will appear across the IAC network and that maybe true, but the IAC network may not be as large as everyone thinks since Expedia will be its own brand.

http://www.fool.com/News/mft/2004/mft04122814.htm

But can they compete? Would they dare?
Not if they don't update their index. I think their current one is about 8 months old? That is ridiculous. They busy themselves with running commercials and the like but do not keep a fresh up to date index.

I don't use them to search so as a searcher I could care less but as a marketer, it is very frustrating indeed.

On removing AdWords, isn't that their main source of revenue? To remove them would kill them I think.

On removing AdWords, isn't that their main source of revenue? To remove them would kill them I think.
Didn't mean to suggest they "remove" AdWord. I meant to replace it with Ask Jeeves PPC. :)

They dont have to compete immediately, they just have to match the revenue AdSense brings them. The advantage of AdSense is really just that it's ad revenue without the need for a corresponding sales staff and service infrastructure. Big publishers and small that have complementary sales structures and know their markets (and whose markets know them - that's the other advantage of AdSense, you don't need credibility, which obviously doesn't matter in the case of IAC) can easily match the AdSense revenue with their own product.

But can they compete?
No.

For small time tail buyers, why bother settimng up a campaign for their marketshare? With a small marketshare, not having a wide range of adbvvertisers will lead to significantly increased inventory not being bought. That is why AdWords is better for Ask,a s it has the largest number of advertisers, and that is key to making money with small numbers of seacrhers.

The only way AskPPC would work would be if they could syndicate their results to tier two players, and I don't mean the crappy SEs, I mean places like the Wall Street Journal, NYtimes etc.

Would they dare?
That I can't answer. Fortune is rumoured to favour the bold, but I also heard a rumour it left bold and has shacked up with sensible. Setting up their own PPC would certainly be a bold move, but I am not entirely sure it would be sensible!

HSN
Match.com
Citysearch
Service Magic
LendingTree

are a pretty good network for contextual ad serving. That's where the leverage comes in. IAC has attractive properties in more than just these sectors, where niche advertisers will feel they have to be. Considering, that they can probably take down quite a bit more EPC than they could with AdWords, that just leaves the problem of effectively monetizing the Ask pages. Even with a vastly reduced inventory, I'm sure they could find plenty of networks eager to distribute via Ask.

Competing with AdWords isn't really an impossible task, there are hundreds of sites doing so and making a lot of money. It is not necessary to crush and dominate Google in order to survive at this game.

It seems like people are always looking for a low cost, reliable and relevant alternative to Yahoo and Google. Most advertisers I know use the big two, and probably always will, but they also like the idea of a reputable 2nd tier option. So far this has been hard to find. Many have come and gone and now the big names out there like Miva, Looksmart, etc. aren't doing so well.

When I say "not doing so well," I mean in terms of what they do for our clients. I don't feel very confident recommending to anyone to buy ads with them at this point. If Ask can create an ad network that serves to quality sites and provides relevant, moderate amounts of traffic, then there in the perfect niche.

one thing ask will really have going for them is the partnership with all those vertical sites they own. if they allow people to somehow tap ads on some of the traffic from those travel sites they could get a good amount of high value traffic from that, and I think they have like mortgage and dating sites.

overall I can't see them competing with Google anytime soon, but they will have a ton of traffic in a few expensive verticals.

Most likely Ask Jeeves HAS TO DO it, because Google can either stop the contract after 2007 or renegotiate much bigger share. If Barry Diller really wants to compete against Google, Yahoo and MSN, such a move is a must.