IAC Sells Ask.com Short? $3.5 billion Google Deal
I have been asking Ask.com if would bite the we can sell all our own ads bullet for the past year. Parent IAC proudly answered NO today: Barry Diller hailing a $3.5 billion plus five year re-upping with Google.
Last January, I asked Jim Lanzone, Ask.com CEO: “On January 1, 2008, will Ask.com have renewed its paid listing agrement with Google?”
Lanzone told me:
We have to do what is in our short and long term best interests, we have to focus on ROI…Google has historically paid the most, they can give a better deal to potential partners.
We will most likley strike another deal with one of the major netwroks because our own ad system combined with our own ad system will make us the most money. It is going t be a significant deal. We will be the ones with the power in the relationship because we own our traffic.
Ten months later, Lanzone’s foretelling was realized. Ask.com has renewed its relationship with Google, in a long-term deal that IAC is declaring a homerun.
What if IAC controlled all of Ask.com’s ad sales, however? With no rev share, instead of a Google home run, Ask.com could very well hit its own ball out of the advertising park!
Just weeks after I intereviewed Lanzone, Barry Diller weighed-in on the to Google or not to Google Ask.com question, during his Q4 2006 Wall Street earnings call.
DILLER QUESTION: Would it not be more advantageous long-term if Ask.com handled all of its advertising in-house?
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.
The day after Diller’s remarks to wall Street, I heard the IAC CEO address the 2007 Media Summit New York. No opportunity was provided for Q & A upon the conclusion of Diller’s talk; The question I prepared for Diller was:
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.”
In announcing today the IAC plan to spin-off HSN, Ticketmaster, Interval and Lending Tress as four distinct publicly traded companies, Diller said his online advertising focused “Internet conglomerate,” of which Ask.com is a trophy property, will benefit form “standing on its own.”
Wouldn’t Ask.com itself benefit even more from standing on its own, for ALL its advertising?
Google is Ask’s prime competitor. While Google can afford to be a strong proponent of coopetition, underdogs have a greater chance of becoming the big dog if they rely on themselves for their futures, rather than piggybacking on the success of their arch competitive rivals.
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