Wow this is one of the deals that do not happen too often - Askjeeves has agreed to be acquired by IAC for $ 1.85 billion.

""It's about growth," Jeeves CEO Steve Berkowitz said. Jeeves' properties have about 42 million unique users, according to comScore, and IAC's properties, which include Expedia, Hotels.com, Evite and LendingTree, have about 44 million users.

IAC CEO Barry Diller said the companies hope to close the deal late in the second quarter or early in the third quarter, and will almost immediately launch the cross-promotional efforts that appear to be the primary reason for the acquisition.

Each of IAC's properties will have a prominent Jeeves search box. Jeeves' properties will promote IAC's brands in the form of responses to questions, such as providing CitySearch links to questions about local services."

"Jeeves runs its main site at Ask.com, and global versions, but also owns Excite, iWon, Bloglines and MyWay. Together, it is a top-five search player, but still considerably lagging behind Google, Yahoo, AOL and MSN in terms of share."

Using Merrill Lynch data, IAC estimates that online search-related advertising will grow 24% a year over the next five years, and that online ads, currently at 4% of total US ad spend, will become a much larger piece of advertising budgets in future

"Jeeves currently uses Google's sponsored search service to generate much of its revenue. That deal expires in 2007. There is no get-out clause if Jeeves is acquired, and Diller said there are no plans to drop Google even in 2007, although he did point out that CitySearch, for example, already does localized advertising."

It really seems that online advertising is a goldmine to dig in. I'm a large believer in this market that is just evolvin anew after the boom. My gut feel this is a clever deal by Mr. Diller.