IAC CEO Barry Diller on Ask.com

IAC on Ask.com
Written by Donna Bogatin, Contributor

A few weeks ago I asked Jim Lanzone, CEO, Ask.com, for his thoughts on Barry Diller, CEO of corporate parent IAC, considering Ask.com to be the “glue” for IAC’s “integrated conglomerate” of Web properties. SEE “Jim Lanzone’s vision for Ask.com: ‘Real Deal’ Interview

Lanzone told me he prefers to see himself operating as a “chef” remixing content ingredients to create a better search experience for searchers on the Web:

The vision for Ask, both internally and with IAC, is not just a website with a bunch of links to other IAC properties. We are a world-class technology company and we are able to take ingredients from our sister companies, luckily in many cases premium ingredients because they are number 1 and 2 in their category, and we can remix those ingredients into something that is market leading in a particular vertical. That is exactly what we did with AskCity.

We took ingredients from a lot of companies, but not just IAC companies, we mix it all together into the best local search product online. That is how IAC and Ask can really accelerate the curve for each other. At the end of the day it can be a virtuous circle, by driving them traffic. But as a consumer based product, especially one that is free, you have to lead with what is best for the user. That is our focus.

We have 30 million users in the U.S., we are the fourth ranked search site in the U.S. You can be fourth in search and still be much larger than people are in many other categories.

Today, I asked Diller for his thoughts on Lanzone’s preference for the title of “chef,” rather than glue master. Diller delivered the opening keynote at the 2007 Media Summit New York and I chatted with him before he took the stage. 

Diller laughed when I recounted my conversation with Lanzone, offering “he can call himself whatever he wants, he’s that good!” Diller, however, still refers to Ask.com as IAC’s glue, he reiterated the concept this morning during his keynote. 

Diller spoke about IAC’s decision making process for the $1.78 billion acquisition of the Ask Jeeves search property in 2005.

Photo by Donna Bogatin

IAC originally evaluated search in terms of defensive posturing; Would search disintermediate the IAC properties? IAC concluded that brands could persevere if innovation continued and looked at search as an opportunity rather than a threat.

IAC considered Ask Jeeves to be the only pure search play and was attracted to its focus on context and community in the delivery of search results, rather than Web “popularity.”

In analyzing the search opportunity, IAC graphed: Google, Yahoo, Microsoft, AOL, Ask Jeeves. 

At number five, Ask Jeeves was barely a tenth of the size of market leading Google. Does the property have a “fighting chance,” IAC pondered. Diller’s philosophy is that competing with less resources is not necessarily a bad thing.

Diller said today that he likes the notion of competing in a “most unfair fight.”

Moreover, the bottom-line assessment for him is “How much do you risk, if you fail.” IAC concluded that the “rising tide” of Internet advertising would invariably sustain Ask Jeeves. 

Today, Diller believes “we’re in a great fight.” He put forth that Ask’s search is “in many cases a much better search experience”:

I don’t care who the leaders are, eventually product “outs.”

Diller was asked if Ask can go from single digit search market share to double digits: 

The media model is not winner take all indefinitely. If there is no other ad network than Google, then we are all in trouble.

Diller’s support today for competing ad networks contrasts with his remarks yesterday during IAC’s Q4 2006 conference call. Diller was asked the question I have been asking at this Digital Markets Blog and recently posed directly to Lanzone: Would it not be more advantageous long-term to handle all of your advertising in-house? 

Diller: As far as doing it ourselves, we thought originally and we continue to do work in this area. We do do it ourselves; we do all sorts of ad products inside Ask.com for ourselves, for our own account. But as far as the ad network business, there are, as you know, three players in it currently. I think there probably won't be a fourth. At some point, I can't say what will happen out of the growth of advertising in this area, but right now, I would much, much, much prefer to rent it. I think that we will be well-served by that, certainly for a period of time.

No opportunity was provided for Q & A upon the conclusion of Diller’s talk. The question I prepared for Diller is: 

You indicated this morning that starting as the number five search engine is not a bad thing. Yesterday, you inferred that being the number four search advertising network may not be a good thing. 

Why are you willing to share Ask's monetization with competitor Google when you believe “if there is no other ad network than Google, then we are all in trouble.”

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