Merger He Wrote Analysis/Commentary Can an intelligent, sophisticated search technology escape the current Internet-only business shakeout? Merger -- or, more precisely, partnering -- might be the key. Ask Jeeves at Ask.com has been growing and struggling for three years now. It grows because it has a useful product, a natural language database system that answers plain language questions, rather than fetching everything remotely euphonious. With its trademark butler, Jeeves, the software allows Net searchers to hone down relevant data. It performs a combination of natural language structure analysis (it asks itself what is the verb, subject, and object of a query), creates a repository of structured information (data mining), and adds editorial fine-tuning. Real people do spot checks to find out whether search answers are appropriate. The software also filters itself to determine the angle or gist of a query before attempting a second or third reply. In a sense, it learns. Ask Jeeves runs its own site, as well as providing search technology for portals or infomediaries like Ford, Dell, and Martha Stewart. Based in Emeryville, Calif., it boasts 4 million questions answered each day and over 100 corporate customers. Jeeves makes money by leasing out its technology and selling advertisements on its site. But artificial intelligence technology doesn't always impress Wall Street or the venture capital partnerships in California. Analysts and entrepreneurs prefer to examine income statements and quarterly filings. They want to see profits. This is part of the reason Jeeves laid off a quarter of its 640 staff members earlier this month. Meanwhile, another company also struggles to make good its promises. Harvard.net of Boston, originally a digital ISP, recently turned its business around, and laid off 280 of its 480 employees. (In recent months, DSL stocks have plummeted.) What's a pair of well-funded but beleaguered companies to do in times of technology stock collapse? Jeeves decided to bring Harvard.net in as a partner, while Harvard abandoned DSL and turned to web hosting for Jeeves. Jeeves will do what it does best -- sell software to customers and run advertising -- while Harvard guarantees security, high bandwidth, and 24 hour state-of-the-art switching and web page serving. Harvard will handle a third of Jeeves traffic, and help in the "business solutions" (software leasing) side of Jeeves business. It will also drop all of its 2,000 DSL customers. As the little drama plays out, the prime suspect may well have plotted the caper -- with some hardware assistance from Harvard. But time will tell whether both escape the law of diminishing returns. December 20, 2000