Ask Jeeves Reports First Quarter 2001 Financial Results

Company Confirms Fourth Quarter 2001 Pro Forma Profitability Target; Expects

To Exit 2001 With Cash Position of Approximately $50 Million; Announces

Workforce Reductions



Skip Battle and Steve Sordello Named Permanent CEO and CFO, Respectively;

Steve Berkowitz, Former President and COO of IDG Books, Joins as President

Of Web Properties



Apr 25, 2001, 01:00 ET from Ask Jeeves, Inc.

    EMERYVILLE, Calif., April 25 /PRNewswire/ --
 Ask Jeeves, Inc. (Nasdaq: ASKJ) today reported revenues of $19.1 million for
 the first quarter ended March 31, 2001.  This compares to revenues of
 $23.0 million for the fourth quarter of 2000 and $17.8 million for the
 year-ago quarter.  Pro forma net loss for the most recent quarter, which
 excludes stock-based compensation, amortization of goodwill associated with
 acquisitions, and one-time items, was $14.4 million, or ($0.40) per share,
 compared to a pro forma net loss of $18.8 million, or ($0.59) per share, for
 the first quarter 2000.  Including these charges, net loss for the first
 quarter 2001 was $39.0 million, or $1.09 per share.  This compares to a net
 loss of $47.2 million, or $1.48 per share, for the first quarter 2000.
     "Our first quarter results demonstrate the progress we are making on our
 objectives across our businesses," said Skip Battle, chief executive officer
 of Ask Jeeves.  "We successfully streamlined our organization and improved our
 operating costs while continuing to make investments for growth in both
 businesses.  I believe the operating budget and initiatives we have in place
 not only reflect the reality of the market environment, but also allow us to
 serve our customers, complete development of our promising new products and
 execute our growth strategy."
     During the first quarter of 2001, Web Properties revenue was $9.0 million
 and Business Solutions revenue was $10.1 million compared to revenues of
 $12.5 million and $10.5 million, respectively, for the fourth quarter of 2000.
 Web Properties revenue includes revenue generated from advertising,
 sponsorship and e-commerce sales on Ask.com, DirectHit.com and AJKids.com, as
 well as from sales of Ask Jeeves syndication services.  Ask Jeeves Business
 Solutions revenue includes revenue generated from companies licensing Ask
 Jeeves' technology for site-specific customer support and e-commerce
 applications as well as Ask Jeeves International revenue.
     Cash, cash equivalents and marketable securities totaled $87.4 million at
 March 31, 2001. The company believes it has sufficient cash resources to fund
 its business to profitability on a pro forma basis, which it expects to
 achieve in the fourth quarter of 2001.  Pro forma profitability excludes
 stock-based compensation, amortization of goodwill associated with
 acquisitions and one-time items, such as restructuring charges.
     Battle continued, "We've developed an operating model that is based on
 realistic assumptions that we believe takes us to profitability on a pro forma
 basis within our stated timeframe.  It also leaves us with significant cash to
 fuel our business in 2002 as we expect to exit the year with approximately
 $50 million in cash. I am confident we have the resources to ride out the
 current downturn in the economy.  We recognize that continued execution is
 required to restore confidence and shareholder value. That is our goal for the
 remainder of 2001."
     Ask Jeeves also announced expense reduction measures to further streamline
 its operating model. Among the expense reduction measures is a reduction in
 workforce totaling approximately 75 employees, or 15% of the total workforce.
 As a result of the reductions, the Company anticipates recording a charge of
 approximately $2.0 million in the current quarter. Through this and previously
 announced measures, the Company believes it will generate $50 million in
 annual savings compared to year 2000.
     Commenting on the workforce reduction, Battle added, "The reduction of our
 workforce is a proactive effort that gives us improved flexibility in either a
 challenging, or a thriving market. The majority of eliminated positions are a
 result of the continuing improvements in the automation of our tools and
 technology. Also, given our size, we streamlined the management team and
 general and administrative function. I believe this gives us an organizational
 structure that will allow us to make quick, market-based decisions."
     The Company is evaluating the carrying value of certain long-lived assets,
 consisting primarily of $342.2 million of goodwill recorded on its balance
 sheet at March 31, 2001.  Pursuant to accounting rules, the majority of the
 goodwill was recorded based on stock prices at the time merger agreements were
 executed and announced.  The Company's policy is to assess the impairment of
 long-lived assets when events or changes in circumstances indicate that the
 carrying value of an asset may not be recoverable.  The Company anticipates
 recording additional charges to reduce the carrying value of the unamortized
 goodwill and other long-lived assets and such adjustments could represent a
 substantial portion of their carrying value.  Some of these charges may be
 recorded as an adjustment to the Company's financial statements at
 March 31, 2001 and the Company would report such adjustments in subsequent SEC
 filings.
 
     Management Changes
     Ask Jeeves announced today that A. George "Skip" Battle and Steven
 Sordello have assumed permanent management roles at the Company as CEO and
 CFO, respectively. Prior to assuming their permanent roles at the Company,
 Skip and Steve held acting positions in those capacities. Ask Jeeves also
 announced that Steve Berkowitz, former president and COO of IDG Books will
 join Ask Jeeves as president of Web Properties. (See related release "Ask
 Jeeves Appoints Management Team")  They join Claudio Pinkus, president of Ask
 Jeeves Business Solutions, and George Lichter, president of Ask Jeeves
 International, to comprise the Company's executive management team. Ask Jeeves
 also announced that Adam Klein resigned as president.
 
     Web Properties Highlights
 
     -- Ranked number one search engine. According to the most recent report
 from Media Metrix dated March 2001, Ask Jeeves was ranked the number one
 search engine.
     -- Rising consumer traffic, resulting in top 20 Web property. Ask Jeeves'
 unique users reached an all time high of 14,054,000, representing a 18 percent
 increase over fourth quarter 2000. Ask Jeeves continued popularity among
 consumers makes Ask Jeeves the 17th most visited Web property, according to
 Media Metrix' March report.
     -- Launched new advertising products. Ask Jeeves launched four new
 performance-based ad products during the first quarter. These products
 leverage Ask Jeeves natural language technology to offer companies targeted
 opportunities to build brand awareness, drive qualified traffic and increase
 transactions on the Web.
 
     Business Solutions Highlights
 
     -- Customer satisfaction delivers renewal rates above 90%. Corporate
 renewal rates remained above 90 percent during the first quarter. Client
 renewals included Compaq, Datek, Dell, Radio Shack, E*Trade, TD Waterhouse and
 Toshiba.
     -- Advancements in automation reduce implementation times. The progress
 Ask Jeeves has made in automating its tools and technology enabled the company
 to reduce costs of implementation by 60 percent over 2000. In addition,
 implementation time has been reduced to three weeks from eight weeks in 2000.
     -- Development of productized solution on track for release in Q3. Ask
 Jeeves is focusing its R&D resources on the development of a highly automated,
 productized solution that can be installed behind a company's firewall.
 Development of this new product is on target and the company believes will
 remain on schedule for release in the third quarter. This product will enable
 Ask Jeeves to move from the services-based model it has today to a software
 and services model in the future. The company expects this will enhance its
 market opportunity, as well as its margins.
 
     International Highlights
 
     -- Ask Jeeves UK ranked 7th most visited site. Ask Jeeves UK, the number
 seven site in the UK and Ireland, has consistently ranked in the top ten Web
 property rankings for the last six months. According to the most recent Media
 Metrix Europe report, Ask Jeeves UK has more than 3.1 million unique users.
     -- Ask Jeeves en Espanol launched Pregunta.com. Pregunta.com, a Spanish
 version of Ask.com, launched in early March to serve the global Spanish
 speaking Internet community of more than 33 million people.
     -- Ask Jeeves Japan appoints CEO. Ask Jeeves Japan made progress in the
 corporate market and appointed enterprise software veteran, Yoshiharu
 Yamanaka, as CEO.
 
     Business Outlook
     The following business outlook contains forward-looking statements
 intended to provide the range of management's current expectations.  These
 forward-looking statements are subject to risks and uncertainties.  As a
 result, actual results may differ materially from what is expected. The
 guidance provided in this press release is based on limited information
 available to the company at this time, which is subject to change.  Although
 the guidance provided may change after April 25, 2001, the company undertakes
 no obligation to revise or update these statements.
     Steve Sordello, Chief Financial Officer of Ask Jeeves, provided the
 following remarks on the Company's business outlook.
     "Our forward looking remarks take into account the organizational
 improvements we've made and the strategy we've put in place for growth. Our
 guidance for the second quarter and fiscal year 2001 should be taken in
 context of an uncertain economic environment that is tougher than we expected
 and that appears will also last longer."
     "There are a number of characteristics of our business that we've taken
 into consideration in our outlook. First, the number of expiring advertising
 contracts with dot-com companies crested at the end of the first quarter. This
 event took place just as our new ad products are ramping-up. And, while ad
 sales have been stronger recently, primarily as a result of our new products,
 those new contracts are increasingly with brick and mortar companies who tend
 to plan farther out. As a result, we do not expect to start generating revenue
 from those contracts until the latter half of the second quarter and into the
 second half of the year and therefore will not completely cover the expiring
 revenue from the dot-com contracts. This is to be expected as we continue to
 shift our customer base to In addition, the first and fourth quarters are
 typically our strongest quarters given the strength of our Web sites in the
 education market. On the Business Solutions side, our productized solution
 will not enter the market until the third quarter and most of the revenues
 from those bookings will not be realized until next year due to our revenue
 recognition policies."
 
     Second Quarter Revenue, Gross Margins and Operating Expenses and Net
 (Loss)/Income
     Ask Jeeves expects revenue of $17 million for the second quarter. The
 company expects the revenue mix to be about fifty percent from Web Properties
 and fifty percent from Business Solutions. The company expects pro-forma gross
 margins in the low 60 percent range. For Web Properties Ask Jeeves is
 targeting margins in the mid 60s and for Business Solutions the company is
 targeting the high 50 percent range. For operating expenses Ask Jeeves expects
 the following for the second quarter: sales and marketing, approximately
 70 percent of revenues; product development, approximately 30 percent of
 revenues; and G&A approximately 35 percent of revenues. Pro-forma net-loss is
 expected to be approximately $12.0 million, or approximately ($0.33) per
 share.
 
     Second Quarter Cash Utilization
     Total cash usage in the second quarter is expected to approximate that of
 the first quarter.  Ask Jeeves expects to exit the year with approximately $50
 million in cash.
 
     2001 Outlook
     Commenting on the company's year-end 2001 outlook Sordello added, "For the
 year 2001, we no longer expect to see year-over-year revenue growth. We do
 anticipate revenue growth in the second half of the year over the first half
 of the year. However, given market conditions, we believe stating a new
 year-end revenue target would be premature."
 
     Conference Call Scheduled for April 25th
     Ask Jeeves will be holding a conference call to discuss its fourth quarter
 results and its business outlook for 2001 at 5:00 p.m. EDT on April 25, 2001.
 Investors can listen to the conference call on the Internet at
 www.ask.com/investor. To listen to the live call, go to the Web site at least
 fifteen minutes prior to the start time to download and install necessary
 audio software. For those unable to listen to the live broadcast, 48-hour
 replay will be available one hour after the conclusion of the call at
 www.ask.com/investor.
 
     Cautionary Note Regarding Forward-looking Statements
     This press release contains forward-looking statements that involve risks
 and uncertainties that could cause actual results to differ materially.
 Factors that might cause or contribute to such differences include, but are
 not limited to: risks associated with the e-commerce and e-support markets;
 dependence on the Internet; failure to meet research and development goals;
 risk associated with rapid technological change; lack of market acceptance of
 products; introduction of new products by competitors; declines in the average
 selling price of the company's products; and, adverse economic conditions in
 any of the major countries in which the company does business.  Further
 information on potential risk factors that could affect the financial results
 of Ask Jeeves are included in its 2000 Annual Report on Form 10-K, and its
 quarterly reports on Form 10-Q and other filings for 2000 filed with the
 Securities and Exchange Commission.
 
     About Ask Jeeves, Inc.
     Ask Jeeves is a leading provider of intuitive, intelligent question
 answering technologies and services. Ask Jeeves' solutions enable companies to
 convert online shoppers to buyers, reduce support costs, understand customer
 preferences and improve customer retention. Ask Jeeves also syndicates its
 solutions to portals, infomediaries, and content and destination sites to help
 companies increase e-commerce and advertising revenue. For more information,
 visit http://www.ask.com or call 510-985-7400.
 
     -tables follow-
 
     ASK JEEVES, INC.
     PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     (In thousands, except per share data)
 
                                                   Three Months Ended
                                                       (unaudited)
                                            March 31, 2001    March 31, 2000
 
     Revenues:
      Web Properties                         $9,027   47.3%   $12,315    69.4%
      Business Solutions (A)                 10,056   52.7%     5,442    30.6%
      Total revenues                         19,083  100.0%    17,757   100.0%
 
     Cost of revenues:
      Web Properties                          3,099   34.3%     3,309    26.9%
      Business Solutions                      4,135   41.1%     3,827    70.3%
      Total pro forma cost of revenues        7,234   37.9%     7,136    40.2%
 
      Gross profit                           11,849   62.1%    10,621    59.8%
 
 
     Operating expenses:
      Product development                     5,601   29.4%     5,433    30.6%
      Sales and marketing                    14,028   73.5%    19,503   109.8%
      General and administrative              7,864   41.2%     5,037    28.4%
 
      Total pro forma operating expenses     27,493  144.1%    29,973   168.8%
 
      Pro forma operating loss              (15,644) -82.0%   (19,352) -109.0%
 
      Interest and other income, net          1,250    6.6%       524     3.0%
 
      Pro forma net loss                   $(14,394) -75.4%  $(18,828) -106.0%
 
     Basic and diluted pro forma net loss
      per share                              $(0.40)    n.m.   $(0.59)     n.m.
 
     Weighted average shares outstanding
       used in computing basic and diluted
       pro forma net loss per share          35,843     n.m.   31,932      n.m.
 
 
     (A)  Revenues from related parties      $4,814              $388
 
     Reclassifications:  Certain prior period balances have been restated to
     conform to current period presentation.
 
     Note:  The above unaudited pro forma condensed consolidated statements of
     operations exclude the effects of the following:
 
              -- During the three months ended March 31, 2001, amortization of
              purchased technology was $1,094,000.
              -- During the three months ended March 31, 2001, amortization of
              license fees
              in cost of revenues for Web Properties and Business Solutions was
              $219,000.
              -- During the three months ended March 31, 2001, amortization of
              goodwill was $22,369,000.
              -- During the three months ended March 31, 2001, amortization of
              deferred stock compensation             was $385,000.
              -- During the quarter ended March 31, 2001, restructuring and
              other costs were $668,000.
              -- During the quarter ended March 31, 2001, realized gain on
              investments was $101,000.
 
 
     ASK JEEVES, INC.
     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     (In thousands, except per share data)
 
 
                                                       Three Months Ended
                                                            March 31,
                                                          (unaudited)
                                                     2001              2000
 
     Revenues:
      Web Properties                                 $9,027           $12,315
      Business Solutions (A)                         10,056             5,442
      Total revenues                                 19,083            17,757
 
     Cost of revenues:
      Web Properties                                  4,238             4,017
      Business Solutions                              4,309             3,925
      Total cost of revenues                          8,547             7,942
 
      Gross profit                                   10,536             9,815
 
 
     Operating expenses:
      Product development                             5,601             5,462
      Sales and marketing                            14,028            19,503
      General and administrative                      7,869             5,042
      Stock-based compensation                          385               854
      Amortization of goodwill and other
       intangible assets                             22,369            15,025
      Write-off of in-process technology                -              11,652
      Restructuring and other                           668               -
 
      Total operating expenses                       50,920            57,538
 
      Operating loss                                (40,384)          (47,723)
 
 
      Interest and other income, net                  1,351               524
 
      Net loss before income tax provision          (39,033)          (47,199)
 
      Income tax provision                             --                --
 
      Net loss                                     $(39,033)         $(47,199)
 
     Basic and diluted net loss per share            $(1.09)           $(1.48)
 
     Weighted average shares outstanding
       used in computing basic and diluted
       net loss per share                            35,843            31,932
 
     (A)  Revenues from related parties              $4,814              $388
 
     Reclassifications:  Certain prior period balances have been restated to
     conform to current period presentation.
 
 
     ASK JEEVES, INC.
     CONDENSED CONSOLIDATED BALANCE SHEETS
     (In thousands)
 
                                                    March 31,      December 31,
                                                      2001              2000
     ASSETS
     Current assets:
       Cash and cash equivalents                     $35,688           $44,725
       Short-term marketable securities               37,975            47,813
       Accounts receivable, net                       17,341            22,812
       Prepaid expenses and other current
        assets                                         7,315             6,244
             Total current assets                     98,319           121,594
     Marketable securities                            13,732            12,428
     Property and equipment, net                      18,190            19,088
     Intangible assets, net                          359,140           381,577
     Other long-term assets                            2,502             3,180
             Total assets                           $491,883          $537,867
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
       Accounts payable                               $4,109            $5,186
       Accrued compensation and related
        expenses                                       8,404             6,981
       Accrued marketing expenses                        757             3,133
       Accrued restructuring costs                     6,986             9,132
       Other accrued liabilities                       8,370             9,482
       Deferred revenue                               30,616            33,410
       Current portion of capital lease
        obligations                                      891               886
             Total current liabilities                60,133            68,210
     Capital lease obligations, less
      current portion                                  1,240             1,465
     Other liabilities                                 1,224             2,424
             Total liabilities                        62,597            72,099
 
     Commitments and contingencies
 
     Stockholders' equity                            429,286           465,768
             Total liabilities and
              stockholders' equity                  $491,883          $537,867
 
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SOURCE Ask Jeeves, Inc.
    EMERYVILLE, Calif., April 25 /PRNewswire/ --
 Ask Jeeves, Inc. (Nasdaq: ASKJ) today reported revenues of $19.1 million for
 the first quarter ended March 31, 2001.  This compares to revenues of
 $23.0 million for the fourth quarter of 2000 and $17.8 million for the
 year-ago quarter.  Pro forma net loss for the most recent quarter, which
 excludes stock-based compensation, amortization of goodwill associated with
 acquisitions, and one-time items, was $14.4 million, or ($0.40) per share,
 compared to a pro forma net loss of $18.8 million, or ($0.59) per share, for
 the first quarter 2000.  Including these charges, net loss for the first
 quarter 2001 was $39.0 million, or $1.09 per share.  This compares to a net
 loss of $47.2 million, or $1.48 per share, for the first quarter 2000.
     "Our first quarter results demonstrate the progress we are making on our
 objectives across our businesses," said Skip Battle, chief executive officer
 of Ask Jeeves.  "We successfully streamlined our organization and improved our
 operating costs while continuing to make investments for growth in both
 businesses.  I believe the operating budget and initiatives we have in place
 not only reflect the reality of the market environment, but also allow us to
 serve our customers, complete development of our promising new products and
 execute our growth strategy."
     During the first quarter of 2001, Web Properties revenue was $9.0 million
 and Business Solutions revenue was $10.1 million compared to revenues of
 $12.5 million and $10.5 million, respectively, for the fourth quarter of 2000.
 Web Properties revenue includes revenue generated from advertising,
 sponsorship and e-commerce sales on Ask.com, DirectHit.com and AJKids.com, as
 well as from sales of Ask Jeeves syndication services.  Ask Jeeves Business
 Solutions revenue includes revenue generated from companies licensing Ask
 Jeeves' technology for site-specific customer support and e-commerce
 applications as well as Ask Jeeves International revenue.
     Cash, cash equivalents and marketable securities totaled $87.4 million at
 March 31, 2001. The company believes it has sufficient cash resources to fund
 its business to profitability on a pro forma basis, which it expects to
 achieve in the fourth quarter of 2001.  Pro forma profitability excludes
 stock-based compensation, amortization of goodwill associated with
 acquisitions and one-time items, such as restructuring charges.
     Battle continued, "We've developed an operating model that is based on
 realistic assumptions that we believe takes us to profitability on a pro forma
 basis within our stated timeframe.  It also leaves us with significant cash to
 fuel our business in 2002 as we expect to exit the year with approximately
 $50 million in cash. I am confident we have the resources to ride out the
 current downturn in the economy.  We recognize that continued execution is
 required to restore confidence and shareholder value. That is our goal for the
 remainder of 2001."
     Ask Jeeves also announced expense reduction measures to further streamline
 its operating model. Among the expense reduction measures is a reduction in
 workforce totaling approximately 75 employees, or 15% of the total workforce.
 As a result of the reductions, the Company anticipates recording a charge of
 approximately $2.0 million in the current quarter. Through this and previously
 announced measures, the Company believes it will generate $50 million in
 annual savings compared to year 2000.
     Commenting on the workforce reduction, Battle added, "The reduction of our
 workforce is a proactive effort that gives us improved flexibility in either a
 challenging, or a thriving market. The majority of eliminated positions are a
 result of the continuing improvements in the automation of our tools and
 technology. Also, given our size, we streamlined the management team and
 general and administrative function. I believe this gives us an organizational
 structure that will allow us to make quick, market-based decisions."
     The Company is evaluating the carrying value of certain long-lived assets,
 consisting primarily of $342.2 million of goodwill recorded on its balance
 sheet at March 31, 2001.  Pursuant to accounting rules, the majority of the
 goodwill was recorded based on stock prices at the time merger agreements were
 executed and announced.  The Company's policy is to assess the impairment of
 long-lived assets when events or changes in circumstances indicate that the
 carrying value of an asset may not be recoverable.  The Company anticipates
 recording additional charges to reduce the carrying value of the unamortized
 goodwill and other long-lived assets and such adjustments could represent a
 substantial portion of their carrying value.  Some of these charges may be
 recorded as an adjustment to the Company's financial statements at
 March 31, 2001 and the Company would report such adjustments in subsequent SEC
 filings.
 
     Management Changes
     Ask Jeeves announced today that A. George "Skip" Battle and Steven
 Sordello have assumed permanent management roles at the Company as CEO and
 CFO, respectively. Prior to assuming their permanent roles at the Company,
 Skip and Steve held acting positions in those capacities. Ask Jeeves also
 announced that Steve Berkowitz, former president and COO of IDG Books will
 join Ask Jeeves as president of Web Properties. (See related release "Ask
 Jeeves Appoints Management Team")  They join Claudio Pinkus, president of Ask
 Jeeves Business Solutions, and George Lichter, president of Ask Jeeves
 International, to comprise the Company's executive management team. Ask Jeeves
 also announced that Adam Klein resigned as president.
 
     Web Properties Highlights
 
     -- Ranked number one search engine. According to the most recent report
 from Media Metrix dated March 2001, Ask Jeeves was ranked the number one
 search engine.
     -- Rising consumer traffic, resulting in top 20 Web property. Ask Jeeves'
 unique users reached an all time high of 14,054,000, representing a 18 percent
 increase over fourth quarter 2000. Ask Jeeves continued popularity among
 consumers makes Ask Jeeves the 17th most visited Web property, according to
 Media Metrix' March report.
     -- Launched new advertising products. Ask Jeeves launched four new
 performance-based ad products during the first quarter. These products
 leverage Ask Jeeves natural language technology to offer companies targeted
 opportunities to build brand awareness, drive qualified traffic and increase
 transactions on the Web.
 
     Business Solutions Highlights
 
     -- Customer satisfaction delivers renewal rates above 90%. Corporate
 renewal rates remained above 90 percent during the first quarter. Client
 renewals included Compaq, Datek, Dell, Radio Shack, E*Trade, TD Waterhouse and
 Toshiba.
     -- Advancements in automation reduce implementation times. The progress
 Ask Jeeves has made in automating its tools and technology enabled the company
 to reduce costs of implementation by 60 percent over 2000. In addition,
 implementation time has been reduced to three weeks from eight weeks in 2000.
     -- Development of productized solution on track for release in Q3. Ask
 Jeeves is focusing its R&D resources on the development of a highly automated,
 productized solution that can be installed behind a company's firewall.
 Development of this new product is on target and the company believes will
 remain on schedule for release in the third quarter. This product will enable
 Ask Jeeves to move from the services-based model it has today to a software
 and services model in the future. The company expects this will enhance its
 market opportunity, as well as its margins.
 
     International Highlights
 
     -- Ask Jeeves UK ranked 7th most visited site. Ask Jeeves UK, the number
 seven site in the UK and Ireland, has consistently ranked in the top ten Web
 property rankings for the last six months. According to the most recent Media
 Metrix Europe report, Ask Jeeves UK has more than 3.1 million unique users.
     -- Ask Jeeves en Espanol launched Pregunta.com. Pregunta.com, a Spanish
 version of Ask.com, launched in early March to serve the global Spanish
 speaking Internet community of more than 33 million people.
     -- Ask Jeeves Japan appoints CEO. Ask Jeeves Japan made progress in the
 corporate market and appointed enterprise software veteran, Yoshiharu
 Yamanaka, as CEO.
 
     Business Outlook
     The following business outlook contains forward-looking statements
 intended to provide the range of management's current expectations.  These
 forward-looking statements are subject to risks and uncertainties.  As a
 result, actual results may differ materially from what is expected. The
 guidance provided in this press release is based on limited information
 available to the company at this time, which is subject to change.  Although
 the guidance provided may change after April 25, 2001, the company undertakes
 no obligation to revise or update these statements.
     Steve Sordello, Chief Financial Officer of Ask Jeeves, provided the
 following remarks on the Company's business outlook.
     "Our forward looking remarks take into account the organizational
 improvements we've made and the strategy we've put in place for growth. Our
 guidance for the second quarter and fiscal year 2001 should be taken in
 context of an uncertain economic environment that is tougher than we expected
 and that appears will also last longer."
     "There are a number of characteristics of our business that we've taken
 into consideration in our outlook. First, the number of expiring advertising
 contracts with dot-com companies crested at the end of the first quarter. This
 event took place just as our new ad products are ramping-up. And, while ad
 sales have been stronger recently, primarily as a result of our new products,
 those new contracts are increasingly with brick and mortar companies who tend
 to plan farther out. As a result, we do not expect to start generating revenue
 from those contracts until the latter half of the second quarter and into the
 second half of the year and therefore will not completely cover the expiring
 revenue from the dot-com contracts. This is to be expected as we continue to
 shift our customer base to In addition, the first and fourth quarters are
 typically our strongest quarters given the strength of our Web sites in the
 education market. On the Business Solutions side, our productized solution
 will not enter the market until the third quarter and most of the revenues
 from those bookings will not be realized until next year due to our revenue
 recognition policies."
 
     Second Quarter Revenue, Gross Margins and Operating Expenses and Net
 (Loss)/Income
     Ask Jeeves expects revenue of $17 million for the second quarter. The
 company expects the revenue mix to be about fifty percent from Web Properties
 and fifty percent from Business Solutions. The company expects pro-forma gross
 margins in the low 60 percent range. For Web Properties Ask Jeeves is
 targeting margins in the mid 60s and for Business Solutions the company is
 targeting the high 50 percent range. For operating expenses Ask Jeeves expects
 the following for the second quarter: sales and marketing, approximately
 70 percent of revenues; product development, approximately 30 percent of
 revenues; and G&A approximately 35 percent of revenues. Pro-forma net-loss is
 expected to be approximately $12.0 million, or approximately ($0.33) per
 share.
 
     Second Quarter Cash Utilization
     Total cash usage in the second quarter is expected to approximate that of
 the first quarter.  Ask Jeeves expects to exit the year with approximately $50
 million in cash.
 
     2001 Outlook
     Commenting on the company's year-end 2001 outlook Sordello added, "For the
 year 2001, we no longer expect to see year-over-year revenue growth. We do
 anticipate revenue growth in the second half of the year over the first half
 of the year. However, given market conditions, we believe stating a new
 year-end revenue target would be premature."
 
     Conference Call Scheduled for April 25th
     Ask Jeeves will be holding a conference call to discuss its fourth quarter
 results and its business outlook for 2001 at 5:00 p.m. EDT on April 25, 2001.
 Investors can listen to the conference call on the Internet at
 www.ask.com/investor. To listen to the live call, go to the Web site at least
 fifteen minutes prior to the start time to download and install necessary
 audio software. For those unable to listen to the live broadcast, 48-hour
 replay will be available one hour after the conclusion of the call at
 www.ask.com/investor.
 
     Cautionary Note Regarding Forward-looking Statements
     This press release contains forward-looking statements that involve risks
 and uncertainties that could cause actual results to differ materially.
 Factors that might cause or contribute to such differences include, but are
 not limited to: risks associated with the e-commerce and e-support markets;
 dependence on the Internet; failure to meet research and development goals;
 risk associated with rapid technological change; lack of market acceptance of
 products; introduction of new products by competitors; declines in the average
 selling price of the company's products; and, adverse economic conditions in
 any of the major countries in which the company does business.  Further
 information on potential risk factors that could affect the financial results
 of Ask Jeeves are included in its 2000 Annual Report on Form 10-K, and its
 quarterly reports on Form 10-Q and other filings for 2000 filed with the
 Securities and Exchange Commission.
 
     About Ask Jeeves, Inc.
     Ask Jeeves is a leading provider of intuitive, intelligent question
 answering technologies and services. Ask Jeeves' solutions enable companies to
 convert online shoppers to buyers, reduce support costs, understand customer
 preferences and improve customer retention. Ask Jeeves also syndicates its
 solutions to portals, infomediaries, and content and destination sites to help
 companies increase e-commerce and advertising revenue. For more information,
 visit http://www.ask.com or call 510-985-7400.
 
     -tables follow-
 
     ASK JEEVES, INC.
     PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     (In thousands, except per share data)
 
                                                   Three Months Ended
                                                       (unaudited)
                                            March 31, 2001    March 31, 2000
 
     Revenues:
      Web Properties                         $9,027   47.3%   $12,315    69.4%
      Business Solutions (A)                 10,056   52.7%     5,442    30.6%
      Total revenues                         19,083  100.0%    17,757   100.0%
 
     Cost of revenues:
      Web Properties                          3,099   34.3%     3,309    26.9%
      Business Solutions                      4,135   41.1%     3,827    70.3%
      Total pro forma cost of revenues        7,234   37.9%     7,136    40.2%
 
      Gross profit                           11,849   62.1%    10,621    59.8%
 
 
     Operating expenses:
      Product development                     5,601   29.4%     5,433    30.6%
      Sales and marketing                    14,028   73.5%    19,503   109.8%
      General and administrative              7,864   41.2%     5,037    28.4%
 
      Total pro forma operating expenses     27,493  144.1%    29,973   168.8%
 
      Pro forma operating loss              (15,644) -82.0%   (19,352) -109.0%
 
      Interest and other income, net          1,250    6.6%       524     3.0%
 
      Pro forma net loss                   $(14,394) -75.4%  $(18,828) -106.0%
 
     Basic and diluted pro forma net loss
      per share                              $(0.40)    n.m.   $(0.59)     n.m.
 
     Weighted average shares outstanding
       used in computing basic and diluted
       pro forma net loss per share          35,843     n.m.   31,932      n.m.
 
 
     (A)  Revenues from related parties      $4,814              $388
 
     Reclassifications:  Certain prior period balances have been restated to
     conform to current period presentation.
 
     Note:  The above unaudited pro forma condensed consolidated statements of
     operations exclude the effects of the following:
 
              -- During the three months ended March 31, 2001, amortization of
              purchased technology was $1,094,000.
              -- During the three months ended March 31, 2001, amortization of
              license fees
              in cost of revenues for Web Properties and Business Solutions was
              $219,000.
              -- During the three months ended March 31, 2001, amortization of
              goodwill was $22,369,000.
              -- During the three months ended March 31, 2001, amortization of
              deferred stock compensation             was $385,000.
              -- During the quarter ended March 31, 2001, restructuring and
              other costs were $668,000.
              -- During the quarter ended March 31, 2001, realized gain on
              investments was $101,000.
 
 
     ASK JEEVES, INC.
     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     (In thousands, except per share data)
 
 
                                                       Three Months Ended
                                                            March 31,
                                                          (unaudited)
                                                     2001              2000
 
     Revenues:
      Web Properties                                 $9,027           $12,315
      Business Solutions (A)                         10,056             5,442
      Total revenues                                 19,083            17,757
 
     Cost of revenues:
      Web Properties                                  4,238             4,017
      Business Solutions                              4,309             3,925
      Total cost of revenues                          8,547             7,942
 
      Gross profit                                   10,536             9,815
 
 
     Operating expenses:
      Product development                             5,601             5,462
      Sales and marketing                            14,028            19,503
      General and administrative                      7,869             5,042
      Stock-based compensation                          385               854
      Amortization of goodwill and other
       intangible assets                             22,369            15,025
      Write-off of in-process technology                -              11,652
      Restructuring and other                           668               -
 
      Total operating expenses                       50,920            57,538
 
      Operating loss                                (40,384)          (47,723)
 
 
      Interest and other income, net                  1,351               524
 
      Net loss before income tax provision          (39,033)          (47,199)
 
      Income tax provision                             --                --
 
      Net loss                                     $(39,033)         $(47,199)
 
     Basic and diluted net loss per share            $(1.09)           $(1.48)
 
     Weighted average shares outstanding
       used in computing basic and diluted
       net loss per share                            35,843            31,932
 
     (A)  Revenues from related parties              $4,814              $388
 
     Reclassifications:  Certain prior period balances have been restated to
     conform to current period presentation.
 
 
     ASK JEEVES, INC.
     CONDENSED CONSOLIDATED BALANCE SHEETS
     (In thousands)
 
                                                    March 31,      December 31,
                                                      2001              2000
     ASSETS
     Current assets:
       Cash and cash equivalents                     $35,688           $44,725
       Short-term marketable securities               37,975            47,813
       Accounts receivable, net                       17,341            22,812
       Prepaid expenses and other current
        assets                                         7,315             6,244
             Total current assets                     98,319           121,594
     Marketable securities                            13,732            12,428
     Property and equipment, net                      18,190            19,088
     Intangible assets, net                          359,140           381,577
     Other long-term assets                            2,502             3,180
             Total assets                           $491,883          $537,867
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
       Accounts payable                               $4,109            $5,186
       Accrued compensation and related
        expenses                                       8,404             6,981
       Accrued marketing expenses                        757             3,133
       Accrued restructuring costs                     6,986             9,132
       Other accrued liabilities                       8,370             9,482
       Deferred revenue                               30,616            33,410
       Current portion of capital lease
        obligations                                      891               886
             Total current liabilities                60,133            68,210
     Capital lease obligations, less
      current portion                                  1,240             1,465
     Other liabilities                                 1,224             2,424
             Total liabilities                        62,597            72,099
 
     Commitments and contingencies
 
     Stockholders' equity                            429,286           465,768
             Total liabilities and
              stockholders' equity                  $491,883          $537,867
 
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 SOURCE  Ask Jeeves, Inc.