Oakland, California-based Internet search and media firm Ask.com has faced ongoing speculation that it will  abandon its search service and outsource to another firm such as search leader Google, with which it has a five-year, $3.5 billion advertising deal, a scenario parent company IAC/InteractiveCorp. has denied as it instead looks to a day in court next week, where it will defend chief executive Barry Diller's plan to split the firm into four separate companies, and in the process diminish control of Liberty Capital, its largest stakeholder. The speculation helped account for IAC's falling stock prices Friday. Outsourcing Search Despite Friday speculation from Web sites such as Silicon Valley Insider, Ask.com does not have plans to outsource its Web search service, which is driven by technology it acquired from Teoma, according to a Reuters report citing a person familiar with the matter, who said such speculation was incorrect. The Silicon Valley Insider report was cited by Wall Street analysts as playing a role in IAC share prices falling some 7 percent Friday. Silicon Valley Insider writer Peter Kafka wrote Friday morning that Ask.com would move to use Google for search, citing an unnamed source who noted that the firm would also sell or abandon Teoma and its employees, who are thought to number over 100. Reuters did not receive a comment on the matter from Ask.com, nor did CNET - News.com, which contacted Ask spokesman Nicholas Graham, according to a recent report. Barry Diller's IAC Set To Face Liberty Media Next week will see IAC face off against Liberty Media in a court case that will determine whether Diller's media conglomerate can split up into four separate publicly-traded companies even though it would weaken  Liberty's influence over the firm, an upcoming legal battle that was also cited by analysts as a reason for Friday's falling IAC share price. Liberty Media and John Malone, its billionaire chairman, filed its second legal action against IAC in January, looking to remove media mogul Barry Diller and six other directors from IAC's board, which set off increased antagonism in a dispute over control of the $7 billion e-commerce conglomerate. Three law suites have been filed surrounding the matter. Internet and entertainment retailing firm Liberty has also asked the Delaware Chancery Court to approve proposed steps significantly reducing Diller's power over IAC. The court's decision is expected to have a direct impact on control of New York-based IAC. The increasingly caustic legal battle between the firms for control of IAC may be a lengthy one, despite the pleadings of IAC General Counsel Greg Blatt, who said in a recent statement, "Upon reading this latest complaint, it seems Liberty has gotten truly desperate." As Search Speculation Swirls, Ask.com Parent IAC Faces Trial With Liberty Media Some analysts said they would be surprised were Ask.com to outsource search, an area it has focused on in an effort to make the company more profitable. "If that were accurate, that is a big change," Stifel Nicolaus analyst Scott Devitt told Reuters. "They spent a lot of advertising dollars against the unique experience at Ask," Devitt added. In January IAC named Jim Safka the new chief executive of its Ask.com property, as part of several executive management changes in preparation for an upcoming move to split $10 billion IAC to help revitalize the business, which still lags far behind Google in the overall search market despite a strong advertising push. During January 2008 Ask.com held 4.5 percent of the search market, which made it the fifth most popular search engine, a modest 0.2 percent increase from the 4.3 percent share it held during December, according to figures from Web traffic analysis company comScore announced earlier this month. Liberty owns some 30 percent of IAC shares, however through super-voting shares it holds a controlling 62 percent voting stake in the firm. Reaction To Possible Ask.com Outsourcing Among members of the popular online discussion Web site operated by WebmasterWorld, a group of mostly technically savvy search engine marketing (SEM) professionals and webmasters founded by chief executive Brett Tabke, reaction to a possible Ask.com move that would be it outsource search was varied. One WebmasterWorld member would see such a move as a sign that perhaps nobody could succeed in marketing Ask.com. "Well, if Diller couldn't market it, not sure who'd be able to," wrote a member using the handle "jimbeetle." Another WebmasterWorld member questioned whether Ask.com might be better off partnering with Web pioneer Yahoo, should it decide to drop Teoma. "A far better choice on the part of Ask.com would be to partner with Yahoo rather than Google, if only because of Ask's demographic and the potential they've got for 'portalizing' within a niche they've always been strong in, but never have capitalized on," wrote a member using the handle "Marcia." Ask.com rival AOL already has a search and advertising agreement in place with Google. Others noted that they would be disappointed to see Ask.com's Teoma-core search come to an end. "Ask does a lot of things right. It would be a shame to see it disappear," wrote a member using the handle "BillyS." During February Ask.com launched a news searching Web site called BigNews that incorporates video, image, blog content and popularity rankings from community news site Digg with geo-targeted tracking features. Related Links:
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11:54 pm on Mar. 3, 2008 (utc 0)