Megacompanies like Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), and Yahoo! (NASDAQ:YHOO) haven't allowed much room for other players in the online-search space. Just look at AskJeeves' (NASDAQ:ASKJ) fall from its years-ago prominence.
In many respects, the company is lucky to still be alive. Its $4.5 million acquisition of Teoma in 2001 helped, resulting in tremendous growth by essentially allowing AskJeeves to provide its users with more-sophisticated search capabilities.
Then, last year, AskJeeves made a smart bet by purchasing Interactive Search Holdings for $343 million. All told, AskJeeves now has a healthy market cap of $1.4 billion.
Yesterday, the company made yet another important acquisition, this one for Bloglines. Mark Fletcher, Bloglines' founder, is a veteran of the online world who sold his ONElist to Yahoo! in 2000 for $400 million.
As the name suggests, Bloglines focuses on a rapidly growing segment of the online world: the so-called "new age media" of weblogs, or blogs -- essentially online journals that allow the masses to pontificate on anything they want.
Moreover, Bloglines has considerable market share in the "really simple syndication" market, popularly known as RSS -- a new standard that allows online users to filter the news.
The price tag for Bloglines wasn't disclosed, meaning that the company probably has minimal revenues. Actually, one of AskJeeves' goals is to find creative ways to monetize this asset.
Lessons learned in the late 1990s suggest that there may not be an effective way to monetize blogs. For example, in the press release announcing the AskJeeves purchase, Bloglines is described as "the world's most popular free online service for searching, subscribing, publishing, and sharing RSS feeds, blogs, and rich Web content." The dangerous word in that sentence is free.
Yet to remain competitive in this tough space, a company needs to offer comprehensive services. And blogs are becoming a standard feature: Google entered the game two years ago with its purchase of Blogger.
Bloglines will likely bring more appeal to AskJeeves. But the fact remains that Google, Yahoo!, and Microsoft will likely stay in the lead. Perhaps the only way for AskJeeves to be in the top three is to sell out to the top three.
Fool contributor Tom Taulli does not own shares of the companies mentioned in this article.
