• by Gavin O'Malley  @mp_gavin, November 9, 2010

Throwing in the towel on algorithmic search, IAC/InterActiveCorp on Tuesday said it would cut 130 engineering jobs from its Ask.com search unit. The company also plans to close offices in Edison, N.J. and Hangzhou, China over the next several months.

"In the long run this is ultimately best for the Ask.com business and its users," Ask.com President Doug Leeds said in a blog post on Tuesday. "This decision was made for a number of reasons we believe will ultimately benefit our company and our products, including cost, office location, and--most importantly -- focus."

As the company outlined earlier this year, that focus now rests squarely on a Question and Answer strategy, which relies on real people answering questions rather than a search algorithm.

"Contrary to what some outlets are suggesting, Ask.com is not shutting down," said an IAC spokeswomen on Tuesday. "In fact, since launching our Q&A beta in July, we've seen over 40% growth of queries in the form of questions on our site, which indicates that our strategy is working very well."

In the third quarter, IAC's search revenue increased 20% year-over-year to $205.1 million, while operating income in search was up 43% to $28.9 million.

Hoping to give Google a run for its money, IAC acquired Ask.com in 2005 for $1.85 billion. Originally known as AskJeeves and as a natural language search specialist, Ask.com is currently the sixth-most-popular search engine online.

Presently, Google controls 65% of the U.S. search market, according to Nielsen, while Ask.com is barely holding onto 2%.

Admitting mistakes, Leeds said on Tuesday: "Ask has taken a lot of flak through the years, fairly and unfairly, for not having a focused, cohesive strategy, for ping-ponging across different approaches and marketing tactics."

Yet, "the current team ended that," he added. "We know that receiving answers to questions is why Ask.com users come to the site, and we are now serving them in everything we do."

As a result, however, "We need to stop investing in things outside of providing users with the best answers, including making the huge capital investment required to support algorithmic Web search development."

Said Leeds: "This investment in independent Web search is not required by our strategy, nor is it required in the marketplace ... We have access to multiple third-party structured and unstructured data feeds that, when integrated, can provide a Web search experience on par with what we are able to produce internally, at much lower costs."

Ask.com has an existing partnership with Google, which generates a portion of its search results as part of a broader agreement between IAC and Google, which runs through 2012.

Going forward, Leeds said that the execution of the company's Q&A strategy still requires a great deal of technology investment and technical innovation, much of which is search-related -- involving crawling and indexing the Web's breadth of questions and answers, and using search-based algorithms to route the right question to the best potential answerer.

As such, the company's proprietary Answer Products will continue to be a key point of differentiation in the Q&A space, according to Leeds. "We will continue to make the technology investments necessary across all of these fronts to develop the very best Q&A experience on the Web."