• by Gavin O'Malley  @mp_gavin, May 4, 2007

Despite a loss in its share of the search market, Ask.com helped parent company IAC/InterActiveCorp. post a 31.6% rise in first-quarter net income.

IAC's media and advertising business, which includes Ask.com, Ask.com UK and Fun Web Products, saw a 43% revenue boost--from $117.6 million to $168.1 million over a year earlier. Operating profit was $10.5 million, compared with a $6.4 million loss in the same quarter in 2006.

Still, the Ask Network lost ground in the past year and remained a distant fourth in search--behind Google, Yahoo, and MSN. Ask accounted for 5.2% of U.S. Web searches in March--down from 5.9% in March 2006, according to comScore Networks.

To reverse that trend, IAC on Thursday launched a multimillion-dollar Ask.com awareness campaign. The TV and online ad blitz, expected to last a year, will first attempt to get consumers comfortable with algorithms--the formula that search engines use to determine result relevancy. Then, later in the campaign, the ads will explain why Ask's algorithm is special.

Analysts, however, were skeptical about the campaign's potential impact, noting that Ask.com tried a similar marketing initiative last year--highlighting how Ask helps users refine search results--to little effect.

"These big, high-profile marketing campaigns seem to give them a spike, but it doesn't last," said analyst Greg Sterling of Sterling Intelligence. "The media group seems to have grown pretty substantially, but search is a tough market to crack."

Sterling also questioned the focus of Ask's new campaign, created by Crispin Porter + Bogusky.

"You really have to hit the right notes with a campaign like this, and focusing on something as arcane as algorithms doesn't do that," he said. "I think they'd do a lot better focusing on Google, and the perception that it has too much information and power."

Marketing blitzes aside, Ask is pursuing several initiatives to achieve the 10% market share that IAC head Barry Diller publicly wished for earlier this year.

Late in 2006, it launched a local search service named Ask City. It also recently debuted the beta of an experimental search interface dubbed AskX, which could eventually replace Ask.com's home page.

Looking at IAC's broader online strategy--which includes a growing stable of some 65 Internet brands--Ticketmaster sales jumped 26% to $309.9 million, and accounted for 19% of IAC's revenue.

Also, IAC recently announced plans to launch a community site for the black community, which will feature news, entertainment, advice and local business info, and a co-branded personal-finance site with Dow Jones.

In addition, local search and directory business Citysearch doubled its bank of user-generated reviews and content breadth through the acquisition of Insider Pages, a community site with more than 600,000 merchant reviews in 30 markets across the U.S.

Overall, IAC reported first-quarter profits up 31.6%. Net profit rose to $62.1 million, or 20 cents a share--from $47.2 million, or 14 cents a share, year-over-year. Revenue increased 10% to $1.6 billion.