Diller Asks Jeeves, Flickr Says Yahoo!

The New York Times is reporting that Ask Jeeves is to be acquired by IAC for the equivalent of US$1.9 billion in stock. The deal, if completed, makes a certain amount of sense for both companies.

Ask Jeeves has good technology but has been struggling to differentiate itself and grab more search market share. IAC has valuable properties — and owns Jeeves local content partner Citysearch — but has struggled to find "synergies" (read: cross-promotional opportunities) between them and maximize their value.

This will give IAC first-rate search technology as well as a blogging platform (Jeeves very recently acquired Bloglines). It will provide Jeeves with a great many more content assets, as well as deeper pockets.

Together the combined properties represent a potentially formidable ad network. Jeeves had relied primarily on Google for ad revenues, although the company had created AJInteractive out of a number of properties purchased earlier this year (The MaxOnline Network, Excite and iWon).

For both Jeeves and IAC it provides something of an answer to a gnawing question about each company: What are they going to do?

Also today, Yahoo! announced that it was buying the social networking/photo-sharing site Flickr, which no doubt will become part of the core of Yahoo!'s new mega-community initiative, Yahoo! 360.

If deals, like celebrity deaths, come in threes, one has to wonder: What's next?

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