Ask.com Ad Pact With Google Ends Soon
Oct. 9, 2007 (Investor's Business Daily delivered by Newstex) — In February, Barry Diller spoke confidently when he said his Ask.com would soon renew its long-running ad pact with Google that expires at year's end.
Context & Ripple Effects
Ask.com spent 2007 repositioning away from head-on search competition: a May 2007 analysis argued its real future lay in advertising rather than query share, and it launched Ask City late in 2006 hoping to carve out local-search relevance. Its economics, though, still rest on the Google ad partnership Barry Diller inherited when IAC bought the former Ask Jeeves.
The stakes are familiar to Google watchers: the company built its network by locking up third-party traffic through revenue-sharing deals, most visibly the 2005 AOL agreement that cemented its distribution moat. Diller said in February he expected a renewal of the Ask pact before it expires at year's end — yet with weeks left, none has materialized, which is why Investor's Business Daily flags the lapse.
First-order effects
- If the pact lapses unrenewed, Ask.com loses the Google-served ads behind its results and must either strike terms with Yahoo or Microsoft or lean on IAC's own ad sales — a direct hit to the advertising-led strategy it pivoted toward this year.
Second-order effects
- Yahoo and Microsoft gain a rare opening to buy search distribution from a named property, while Google faces the first test of whether its syndication partners can survive without its ads — pressure that compounds given comScore's estimate that Google already handles the bulk of the world's searches.
Third-order effects
- A non-renewal would push second-tier engines further from competing on search and toward being licensed distribution or niche verticals, accelerating the structure where Google sits at the center of a paid syndication web rather than facing rivals head-on.
The trend: Search is consolidating around Google's ad-syndication deals, turning would-be competitors like Ask.com into dependent distribution partners whose independence depends on annual renewals.