InterActiveCorp Acquires Ask Jeeves

InterActiveCorp announced Monday that it would be purchasing the search engine company Ask Jeeves in a $1.85 billion transaction. Barry Diller, CEO of InterActiveCorp, said that growth in the search engine industry was a contributing factor to the company's decision.

The Ask Jeeves buyout is IAC's biggest move since it spun off Expedia in late December, citing that it was viewed as a travel company rather than a Web commerce company.

"We believe that in the future it has the potential to become one of the great brands on the Internet and beyond, and by beyond we mean in wireless, in the search for anything on any device," Diller said of Ask Jeeves.

Under the deal, Ask shareholders will receive 1.2668 shares of IAC for each share they own. The company will still operate as an independent arm of IAC and Steve Berkowitz will remain as CEO of the company.

Both companies said the merger would likely be completed by the fall of this year.

Berkowitz believes that with IAC's help, the service will be able to grow market share in the face of rivals Google and Yahoo. "We are excited about the opportunity to serve as the connection between IAC's constellation of leading online properties to share users and content," he added.