• by David Berkowitz , March 22, 2005

In October 2005, nine months after Enquiro, Did-It.com, and Eyetools released an eye-tracking study reaffirming the importance of high rankings in search engines' natural results and top placement in the sponsored listings, InterActiveCorp's Ask Jeeves rolled out its new site that forever changed the search industry.

That October 24, a normally unremarkable date billed as United Nations Day on bank calendars and greeting card sites, Ask Jeeves rearranged its search results so that the sponsored listings appeared where no one else had previously placed them: running down the left-hand column of the page, with the natural results on the right.

The uproar lasted for weeks. Financial analysts considered the move too risky before the holiday season and downgraded the company. Journalists and bloggers rightly realized what Ask.com was doing: placing the paid listings where users would first see them. Some bloggers added "Boycott the Butler" button ads to their sites. They organized a 'googlebombing' campaign so that that typing "evil search engine" in Google and clicking "I'm Feeling Lucky" directed users to Ask.com.

The executive team at Ask Jeeves held daily crisis control meetings every morning and every evening. One senior vice president whose future success hinged on the new layout became so emotionally erratic that his fiancée called off the engagement. These were trying times.

Yet through all the commotion, Ask.com's traffic kept climbing. And its revenues ballooned exponentially.

In fact, the results were so staggering that every single full-time employee of Ask Jeeves was given a generous stock option package for a Christmas bonus as thanks for their continued belief in the company (though informal surveys said that at one point in November, more than 50 percent were actively seeking employment elsewhere). Analysts reversed their opinions, even if they didn't like how Jeeves was cashing in on user habit. Bloggers kept up their campaigns, which only directed more traffic to Ask.com.

Undeniably, the ads posted conversion rates which were triple industry averages, with some ads seeing 10 times the return on investment (ROI) that the same ads scored on Yahoo! and Google. Even as ad prices climbed with more advertisers eager to try out Jeeves, the ROI went through the roof. comScore's studies on latency effects made the results even more attractive.

Ask Jeeves CEO Steve Berkowitz acknowledged that what helped Jeeves was its "nothing to lose" mentality. The rise of MSN and AOL as No. 3 and No. 4 search players forced Jeeves to innovate. Berkowitz noted in a Forbes cover story, "An ad sales director first suggested the switch. She said, 'Maybe the natural results perform better not because they're what people want, but because they're where people are used to looking first.'"

With all the attention, and with switching search engines so easy for users who had a hard time distinguishing one's bells and whistles from the others', Jeeves roared into the No. 3 slot by March 2006. MSN and AOL fumed, as Jeeves continued to post stronger conversions than any other search engine. The increased traffic multiplied by the better performance led Jeeves to mull a stock split.

In April 2006, MSN Search retooled its results to mirror Ask Jeeves and backed it up with an $850 million international media buy. One month later, AOL followed, launching a cross-media campaign that utilized Time Warner's print and television properties, garnering AOL effusive praise from MediaPost and other trade publications.

All benefited, with MSN barely retaking its third-place ranking just as its contract with Overture expired that summer. Jeeves and AOL continued to jockey for the No. 3 slot, at the expense of the top two engines. JupiterResearch and eMarketer raised their forecasts for online advertising, entirely due to higher search projections.

Investors were punishing Google and Yahoo! with each passing day. The other three kept delivering stronger returns. On September 23, 2006, Google's stock dipped into the double-digits, and new class action lawsuits were filed against analysts for repeating their dot-com bubble exuberance.

On October 12, Apple announced it was acquiring Google for $105 per share. Philip Schiller, Apple's senior vice president of Worldwide Product Marketing, replaced Eric Schmidt as Google's top executive. Google, considered an independent subsidiary, retooled its interface on every one of its properties, arranging the sponsored links on the left.

Yahoo! weathered the storm better than its counterpart thanks to the continued strength of rich media and subscription services. Its search business grew too, but not at the pace of the others. CEO Terry Semel considered his retirement options.

Then, in early 2007, Ask Jeeves reported its first revenue declines in years. The conversion rates fell after the holidays, along with the traffic. Google, MSN, and AOL quickly followed in reporting similar trends. On one day, March 22, 2007, 28 percent of the wealth created by the search industry reportedly evaporated. Even Yahoo! suffered, though for others' actions. SBC purchased Yahoo! for $27 per share in what, even decades later, was considered one of the best buys in the history of acquisitions. In the fall of 2007, IAC sold Ask Jeeves to MSN for $775 million.

After years of the search engines testing consumer preferences and patience, a battery of new research showed consumers voted overwhelmingly for the natural results with their clicks, spending, and preferences. The ever-savvy consumers trained themselves to scan the natural results first regardless of where they appeared on the page. Whether they realized it or not, they showed the greatest preference for the natural results on the left.

In an interview many years later, Ask.com's Berkowitz reminisced to Danny Sullivan in front of the 4,500 paid attendees at Search Engine Strategies: Bangalore, "It's hard to say whether what we did was right or wrong. But at least we innovated. And that counts for something, right?"