AC/InterActiveCorp, the Internet company headed by Barry Diller, is close to an agreement to acquire Ask Jeeves, the nation's fourth-largest search engine company, for about $1.9 billion, according to an executive involved in the negotiations.

An announcement could be made as early as Monday.

IAC/InterActive owns a variety of Internet businesses. Its principle holdings are Expedia, Ticketmaster, Home Shopping Network, Match.com and CitySearch. Advertising spending on search sites is rapidly growing and Diller's company appears to be trying to tap into a market dominated by Google and Yahoo.

Most of Ask Jeeves' revenue comes from advertising that appears on its sites through a contract with Google. That contract runs through 2007.

Fourth-quarter profits and revenue at Ask Jeeves, whose brands include Ask.com, Excite.com and iWon.com more than doubled. Net income rose to $17.5 million, and revenue rose to $86.1 million from $31.8 million a year earlier.


IAC/InterActive has 44 million visitors a month to its various sites. CitySearch, one of its holdings, is a network of city guides that provide information on restaurants, bars and events in different cities. By marrying a local-search business with a global search engine, Interactive hopes to benefit from further growth in targeted keyword advertising, the executive involved in the deal said.

As an example, CitySearch customers can specify a certain kind of restaurant, and choose from a list of neighborhoods in the city they have chosen.

IAC/InterActive is expected to acquire Ask Jeeves in a stock transaction, exchanging shares in IAC/InterActive for shares in Ask Jeeves then buying 60 percent of the just-issued IAC/InterActive shares back for about $1.2 billion.

Ask Jeeves closed Friday at $24.24 a share, and IAC closed at $22.29. The bankers in the deal are J.P. Morgan, Allen & Company and Citibank. Ask Jeeves bills itself as an English-language friendly Web site that encourages users to formulate searches in question form.

Entire contents, Copyright © 2005 The New York Times. All rights reserved.

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