Jim Lanzone. Chief Executive of Ask.com:
For Technology Guardian, Oct 5, 2006.
By Kate Bulkley
What happened after they killed the butler
Ask.com, formerly Ask Jeeves, ranks fourth in the search engine stakes with about 5% of the market. It was bought in 2005 for $2.3bn by Barry Diller's IAC
Kate: You have been chief executive of Ask.com for six months but have been at the company for a little over five years. A lot has changed since Ask Jeeves, as it was known then, acquired your company, eTour, in 2001.
Jim Lanzone: Yes, a lot has changed. First, eTour was definitely a Web 1.0 company, pre cost-per-click ad sales. We did cost-per-visitor, where people would sign up and give us 200 data points and we would take them on tours that would match their interests. It was cool and we did well from the advertising, but we did the whole aborted IPO thing [stock market flotation] in 2000 and lived on fumes for a while until we were bought by Ask Jeeves.
Kate: So you were just too early.
JL: Or those who refuse to learn from history are doomed to repeat it! [laughs] I just don't know which one it is. But I will tell you that six months after I joined Ask and became head of product management, I shut down eTour along with about eight other things. At the time we were doing too many things, so one of the first things we did was pare down to focus on search.
Kate: So search became the focus but you also changed the whole way the Ask Jeeves product worked. That was a pretty fundamental switch.
JL: The Ask Jeeves product then was editorial based with editors literally coming up with answers and creating a "technology" that would match those answers to certain questions. But then, frustratingly, you would also get back a list of more questions. The concept was revolutionary but it over-promised and under-delivered. Compare that with search engines that weren't promising anything and over-delivering!
We saw that the only way to answer billions of searches was with technology and an index of billions of documents, so we had built the wrong product for search. So we got rid of that original Ask Jeeves product and replaced it with the Teoma product that we bought in late 2001. Teoma could layer across the majority of queries, and then we went about building a second generation of structured data search, which we call Smart Answers.
Kate: But Ask.com is still very far behind the other search engines in terms of market share, and one reason is your basic algorithmic search is not as good. So why not fix that?
JL: That is true about our algorithmic search but I would also say we have the most upside potential because we are five years younger than Google. We started our search technology in 2001 with seven people. Google was started in 1996 and got to market in 1998, and by the time we were doing search they already had 100m searches a day. So they were far ahead in terms of life cycle, and then Yahoo bought Inktomi and AltaVista and larger companies.
What we have is probably what I would call the best special sauce. We do the hardest part well. What we don't do well enough yet are the basics, the ingredients, the infrastructure of search that requires a lot of manpower and a lot of resources and a lot of trial and error. So I think about it like we have gourmet chefs who have been using worse ingredients to make a search engine.
Kate: But Google has 44% share and you have 5% share. That is a pretty big gap. You say you have more upside, but can you ever catch up?
JL: I think that is the wrong way to look at it. I think this is not a zero sum game. Search is a very large market, in fact the largest online market. So even though we are fourth in search we are seventh ranked overall web property in the US, ahead of New York Times, Amazon and MySpace for user numbers. They have more page views but search isn't about page views.
For us, every point of market share that we gain is very significant. A 1% gain for our competitors means they might be making a quarter of what we are making in new revenue. So if we go from 6 to 7% share, it would be 15% in revenue growth.
Kate: Why did you get rid of Jeeves? It seems counterintuitive to dump a brand that had some recognition. So why did you dump the butler?
JL: We dumped the butler because we have become a world class, comprehensive search engine that was recognised by the search industry as one of the best. But the average consumer associated us with questions and answers, which is only 10% of the overall search market. So Jeeves was something we had to move on from if we were going to aggressively go after market share and be a legitimate player in this space. It wasn't a flippant thing.
Kate: With the relaunch, you've reduced the amount of ads on the search results page, which is certainly a good thing from a consumer perspective, but not so good for your revenue growth. What's the new business model now you're owned by Barry Diller's IAC?
JL: The model is making more money by having more searches conducted on our site as opposed to making more money per search. So, sell more copies of the newspaper rather than having more ads per newspaper. One of the benefits of being purchased by IAC was that they gave us the air cover to reduce the number of ads from 10 at the top to only three. We also now have five at the bottom, making a maximum of eight, whereas our competitors have a maximum of 11 ads and most of them are on the first screen.
Kate: How badly has the cost of the relaunch hit your profitability?
JL: We are still very profitable. When I joined the company in 2001 we were worth $30m, but we eventually sold for $2.3bn to IAC in 2005. The stated number at the time of the sale was 25% revenue reduction short-term. We haven't made any on the record statements since then, but you can see our market share growth and those additional searches are bringing in additional money.
Kate: So how long will the "air cover" from IAC last?
JL: I don't think that's a stated number, but I can say that IAC share our passion for our product. We think the masses are brainwashed that search hasn't evolved beyond the search that they are used to, and Ask can help them find what they're looking for faster. IAC and Barry Diller in particular are firmly on the same page about that.
Kate: How do you fit in with the other IAC online products such as Match.com, Homeshopping Network, TicketMaster and lendingtree.com?
JL: I would think of us as the hub of the network. We're a different animal to the other properties because they're all e-commerce properties. Search sits horizontally across the web, so the first order of business is to build up our site enough so that the traffic we send to the other sites is substantial.
Kate: What about expanding beyond search? Everyone else is. Google has Gmail, maps, shopping etc, Yahoo is getting into content in a big way. What are your plans beyond search?
JL: The big difference for us is that we are going to stay focused on search. It is still the number one need, it's the doorway. We are going to continue to build great doorways, not destinations. The product roadmap for us is to be able to find stuff that you're looking for faster, whether it's content, commerce or community. Our first job is to become a preferred primary search engine. Now because search engines are naturally hubs to the internet, people may want email from us as a matter of convenience, but it's nowhere on our roadmap today. If there was demand, I could see us building it, but I don't see us getting into the content business. Our job is to search content, not provide it.
Kate: How do you see search evolving? Are search engines going to just add more and more results to a search?
JL: Some 75% of clicks into a search engine happen in the top three results and 90% of users never go beyond the first page of results. So when you see it saying "now searching number one through 200,000", people are only looking for 10. And although 40% of people say they want "advanced search", less than 1% use it. So, our search suggestions on the righthand side of the page give you those clues right there. So, if you type in John Lennon, we give you Yoko Ono.
Jim Lanzone, CEO of Ask.com
Education BA from UCLA and JD/MBA from Emory University
Career history Co-founded information retrieval service eTour, sold to Ask Jeeves in 2001. Lanzone previously worked in product marketing for KnowX.com, one of the internet's leading providers of public record search; since 2001 has worked at Ask.com, becoming CEO in April 2006