IAC/InterActiveCorp announced their $1.8M acquisition of Ask Jeeves today. It is an interesting addition to their already diverse portfolio that includes Home Shopping Network (HSN), Citysearch, Expedia, Hotels.com, Hotwire.com, LendingTree.com, Match.com and TicketMaster. A couple of weeks ago IAC also acquired a leading catalog retailer, Cornerstone Brands, who’s portfolio includes the catalogs and websites of Frontgate, Ballard Designs, Garnet Hill, Smith and Noble, The Territory Ahead and TravelSmith.

There’s much speculation today about how much investment IAC will have to put into Ask Jeeves’ search technology in order to keep up with investments at Google and MSN Search. But I don’t think that’s what IAC is up to. We all know how the search game works, remember just a few years ago when Altavista was the bee’s knees? And then it was Yahoo, and then Inktomi’s engine and so on. Google as the current king pin, has been trying to broaden its scope of offerings in a bid to retard any advantages that a potential algorithm usurper might bring. Yahoo’s in the same game, be the point of entry for the user on the web, run their email, run their blog/personal web site, so that you are guaranteed attention a.k.a. eyeballs for advertising revenue. And just last month, Ask Jeeves acquired Bloglines – the most used blog reader on the web today. Part of the reason that Bloglines, run by Mark Fletcher with no venture capital, welcomed the acquisition by Ask Jeeves was that ‘One of the things we liked about Ask Jeeves is their multi-brand strategy, and we’ll be operating as one of their independent brands.’ Sounds similar to the way that IAC operates…

Diller’s game (I think) is not to be the ‘one portal’ but instead to own the brands that people associate with specific needs and value propositions. I don’t think they will be pouring tons of money into improving Ask Jeeves’ algorithm (and why would they when Ask Jeeves’ already owns Teoma’s technology that’s probably better and will be integrated into Bloglines). I think they will be strengthening the relationships between all the different products and services that IAC’s portfolio sells. Diller is into owning the channel, and fulfilling the value proposition. I think he’d buy Amazon if he could. So let Google and Microsoft battle it out for better results from pages 10 million deep. He’ll work on selling on you selling you something when you need it. And, oh by the way, check out Gifts.com, IAC’s newest launch, for ‘to be your one-stop destination to manage all of your gifting needs online!’

Mark Fletcher puts it best; as he well knows the basics of how-to-create-a-company-to-keep -customers-happy- and-thus-make-money method:
1. The company must address a pain point, an existing or soon-to-be problem 2. The company must be run lean
3. The company must not require its customers to change their behavior in any significant way

Of course, we at ManyWorlds are just waiting when people realize the game here is not about making search better, it’s about creating and adapting personalized intelligent recommendations that get better over time. And that’s when Epiture will show its true strength.