"We believe that in the future it has the potential to become one of the great brands on the Internet and beyond, and by beyond we mean in wireless, in the search for anything on any device." That's Barry Diller on his company's pending acquisition of Ask. Now, this bears some thinking. I wish I had an open morning to make some calls, but I'm at PC Forum, which is nearly as good as there are no shortage of opinions on this deal here. Also, last night I had dinner with a director at Ask at another event. The long and short of it is this: This is a media play, pure and simple. Here is the third paragraph of the IAC press release, in it's entirety. The online advertising and search markets are growing rapidly; of the $260 billion in total U.S. advertising spend in 2004, less than $10 billion, or 4%, is online, with an expected annual growth rate of 13%. Search is now 36% of U.S. online advertising and expected to grow 24% per year over the next five years (Source: Merrill Lynch Equity Research.) In other words, this makes sense for a company looking to consolidate and leverage its media assets - and IAC is exactly that kind of company. All is not necessarily done in this deal, however. This marks the rise of a fourth network - after Google, Yahoo, and MSN - or maybe a fifth, if you include AOL. And that means that now that Diller has declared himself a player, others may see it in their interest to make their own play. It's entirely possible AOL or even MSN might make a higher bid for Ask. Now that Diller's in the game, it just might change the calculus of the others...
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