IAC/InterActiveCorp and Ask Jeeves, Inc. have signed an agreement under which IAC will purchase Ask Jeeves. Under the terms of the agreement, IAC will issue 1.2668 shares of common stock for each share of Ask Jeeves common stock in a tax-free transaction valued at $1.85 billion net of cash acquired. IAC intends to buy back through its previously authorized share repurchase programs at least 60% of the number of shares it will issue for this acquisition, thus effectively offsetting a substantial portion of the dilution from the transaction with cash. IAC expects the acquisition to be accretive to 2005 Adjusted EPS assuming the buyback at the 60% level.

The combined companies plan to continue building Ask Jeeves by: applying IAC's brand management and marketing, as well as through investment in distribution, R&D, technology and infrastructure, and international markets; leveraging IAC's brands and pioneering new search revenue models by vertically integrating IAC's transaction brands and offers into the Ask Jeeves properties; and promoting the Ask Jeeves search box on every IAC site. IAC operates more than 40 specialized consumer brands in the travel, retailing, ticketing, personals, media, financial services, real estate, and teleservices industries.