InterActiveCorp said Monday that it will buy Internet-search service Ask Jeeves Inc. (www.ask.com) for $1.85 billion, AP reported.
The agreement vaults the Barry Diller-led company into the Web-search arena. IAC currently focuses on electronic-transaction businesses, including travel site Expedia Inc. (www.expedia.com/daily/home), Home Shopping Network, Citysearch, Ticketmaster and online-dating service Match.com LP (www.match.com).
Under terms of the deal, IAC would issue 1.2668 shares of stock for each Ask Jeeves share, valuing Ask Jeeves at about $28.24 per share based on Friday's closing prices, or a 16.5% premium, according to AP.
Ask Jeeves would continue to operate as a stand-alone business based in Oakland, Calif., after the deal is completed, and Steve Berkowitz would remain as CEO, AP reported.
The companies said they expect the deal to close late in the second quarter or early in the third quarter, before IAC spins off its travel business, according to AP.
"We believe that in the future, [Ask Jeeves] 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," Diller told AP.