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PROSPECTUS
ISSUED AUGUST 23, 2000
ASK JEEVES, INC.
5,961,973 SHARES
COMMON STOCK
The selling stockholders identified in this prospectus are selling a total
of 5,961,973 shares of our common stock. All of the shares being offered in this
prospectus were issued to the selling stockholders in connection with our
acquisition of Net Effect Systems, Inc., Direct Hit Technologies, Inc., The
Evergreen Project, Inc., the purchase of assets from Excellerate LLC and the
exercise of our warrants. We are not selling any shares of our common stock
under this prospectus and will not receive any of the proceeds from the sale of
shares by the selling stockholders.
Our common stock is traded on the Nasdaq National Market under the symbol
"ASKJ." On August 22, 2000, the last reported sales price for our common stock
was $20.31 per share.
The selling stockholders may sell the shares of common stock described in
this prospectus in a number of different ways and at varying prices. We provide
more information about how the selling stockholders may sell their shares in the
section titled "Plan of Distribution" on page 27.
Investing in our common stock involves a high degree of risk. See "Risk
Factors" beginning on page 5 to read about risks that you should consider before
buying shares of our common stock.
The shares offered or sold under this prospectus have not been approved by
the Securities and Exchange Commission or any state securities commission nor
have any of these organizations determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
THE DATE OF THIS PROSPECTUS IS AUGUST 23, 2000
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PROSPECTUS SUMMARY
THE FOLLOWING IS A SUMMARY OF OUR BUSINESS. THE DISCUSSION IN THIS
PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISK AND
UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED
HEREIN. THE SECTIONS ENTITLED "RISK FACTORS" BEGINNING ON PAGE 5 OF THIS
PROSPECTUS, AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" AND "BUSINESS" IN OUR ANNUAL REPORT AND QUARTERLY REPORTS
CONTAIN A DISCUSSION OF SOME OF THE FACTORS THAT COULD CONTRIBUTE TO THOSE
DIFFERENCES.
THE COMPANY
Ask Jeeves, Inc. ("Ask Jeeves" or the "Company") provides intuitive,
intelligent question answering technologies and services for companies seeking
to target, acquire, convert and retain customers online. Ask Jeeves' solutions
allow companies to connect users to information through automated search,
natural language question answering, decision advisory support and interaction
with live customer care representatives. We believe that by providing users with
a more intuitive, relevant and flexible way to access information online,
companies will be able to maximize the returns on their Web-based strategies
through better customer targeting and acquisition, increased conversion and
retention rates, lowered support costs and access to customer data. Key elements
of our strategy are to extend our reach in corporate markets, introduce new
technologies and services, provide customer insight, increase awareness of the
Ask Jeeves brand, expand our syndication business and expand our international
presence.
Our question answering service is built on proprietary technology combined
with human intelligence to create an interaction centered on understanding
users' specific needs and interests and connecting them to the most relevant
information, products and services. We introduced Jeeves Answers, our natural
language question answering service, on Ask Jeeves at Ask.com in 1997 to provide
Web users with a more satisfying and productive experience and to help companies
better target and acquire customers. In 1998, we launched a customized service
to develop and implement Jeeves Answers on corporate Web sites to help companies
better acquire, convert and retain customers. In 1999, we expanded our suite of
services to include Jeeves Advisor and Jeeves Live which permit our corporate
customers to offer a decision advisory process and real-time interaction with a
live representative. In February 2000, we added Jeeves Search, a
popularity-based automated search technology that uses the collective queries
and Web site selections of users to deliver relevant results across the Internet
or on a corporate Web site. Our services are built on a flexible, scalable
architecture with an information gathering system that collects users' questions
and selections across Ask Jeeves-enabled Web sites. We store and analyze the
information we collect to improve the performance of our services and to deliver
user insight to our corporate customers.
We deliver our question answering technologies and services through our Web
Properties Group and our Business Solutions Group. Our Web Properties Group
delivers potential customers to companies' Web sites through a combination of
advertising, sponsorships, listing and shopping services available on Ask.com,
AJKids.com and DirectHit.com. Currently, we reach millions of Web users through
our Web Properties Group, enabling companies to reach a broad set of potential
customers. Our Business Solutions Group develops and maintains customized
automated search, natural language question answering, intelligent advisor and
live help services on corporate Web sites. We believe our corporate services
help companies convert shoppers to buyers, reduce support costs, gain consumer
insight and improve customer retention. The Business Solutions Group provides
these services on an outsourced basis with little involvement from our corporate
customers' technical personnel.
In November 1999, we acquired Net Effect Systems, Inc., a provider of a live
help service that enables real-time, text-based communication between a company
and its online customers. In February 2000, we acquired Direct Hit
Technologies, Inc., a leading provider of technology that aggregates and
organizes online content to enable users to quickly find relevant and accurate
information, products and services. We believe that the addition of online live
help technology and
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popularity-based search technology to our natural language question answering
technology will increase the likelihood that users will find more relevant
answers and will do so more efficiently.
In the fourth quarter of 1999 we created Ask Jeeves International, Inc., a
wholly-owned subsidiary, to make our interactive network accessible worldwide.
Central to these efforts is customizing our interactive network for both
language and cultural differences.
We were incorporated in California in June 1996 and reincorporated in
Delaware in June 1999. Our principal executive offices are located at 5858
Horton Street, Suite 350, Emeryvillle, California 94608, and our telephone
number is (510) 985-7400. Our World Wide Web site address is www.Ask.com. The
information in the Web site is not incorporated by reference into this
prospectus.
THE OFFERING
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<S> <C>
Common Stock offered by selling
stockholders............................... 5,961,973 shares
Common Stock offered by us................... 0
Common Stock to be outstanding after the
offering................................... 35,666,062 shares (1)
Use of Proceeds.............................. We will not receive any proceeds from the
sale of common stock by the selling
stockholders.
Nasdaq National Market symbol................ ASKJ
Risk Factors................................. You should read the "Risk Factors" section,
beginning on page 5, as well as the other
cautionary statements, risks and
uncertainties described in this prospectus so
that you understand the risks associated with
an investment in the common stock.
</TABLE>
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(1) Excludes (a) 6,061,575 shares of common stock issuable upon the exercise of
options outstanding as of June 1, 2000, with a weighted average exercise
price of $28.55 per share, (b) approximately 236,339 shares of common stock
subject to outstanding options with a weighted average exercise price of
$9.61 per share assumed as part of the Direct Hit acquisition, (c) an
aggregate of 1,583,215 shares of common stock reserved for future issuance
under our stock option plans, (d) an aggregate of 286,850 shares of common
stock reserved for future issuance under our 1999 Employee Stock Purchase
Plan, and (e) 8,750 shares of common stock issuable upon the exercise of
warrants outstanding as of June 1, 2000, with a weighted average exercise
price of $14.00 per share. Includes 4,751,878 shares of common stock issued
in connection with our acquisition of Direct Hit in February 2000 and
1,715,000 shares issued in connection with our public offering effective
March 13, 2000.
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW, TOGETHER WITH ALL
OF THE OTHER INFORMATION INCLUDED IN THIS PROSPECTUS, BEFORE MAKING AN
INVESTMENT DECISION. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS,
FINANCIAL CONDITION OR OPERATING RESULTS COULD BE SERIOUSLY HARMED. IN SUCH
CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL
OR PART OF YOUR INVESTMENT.
OUR BUSINESS IS EXTREMELY DIFFICULT TO EVALUATE BECAUSE OUR OPERATING HISTORY IS
LIMITED.
We were incorporated in June 1996 and launched Ask Jeeves, at Ask.com, our
public Web site, in April 1997. Our business model is constantly evolving.
Because the Internet is constantly changing, we may need to change our business
model to adapt to those changes.
In November 1999, we acquired Net Effect Systems, Inc., a provider of a live
help service that enables real-time, text-based communication between a company
and its online customers. In February 2000, we acquired Direct Hit
Technologies, Inc., a leading provider of technology that aggregates and
organizes online content to enable users to quickly find relevant and accurate
information, products and services. These acquisitions and future acquisitions
and the resulting changes in organizational structure could impose significant
burdens on our management and our employees and could result in loss of
productivity or increase attrition.
Any investment in our company must be considered in light of the problems
frequently encountered by companies in new and rapidly evolving markets. To
address the risks we face, we must, among other things:
- maintain and enhance our brand;
- expand our product and service offerings;
- increase the amount of traffic to Ask.com and DirectHit.com;
- increase the number and types of businesses that use our question
answering service;
- increase the value of our question answering service to our users,
customers, electronic commerce merchants and advertisers; and
- attract, integrate, retain and motivate qualified personnel.
We cannot be certain that our business strategy will be successful or that
we will successfully address these risks.
WE HAVE A HISTORY OF NET LOSSES AND EXPECT TO CONTINUE TO INCUR NET LOSSES.
We expect to have net losses and negative cash flows for the foreseeable
future. The size of these net losses will depend, in part, on the revenue growth
from our advertisers, corporate customers, syndication relationships, and
electronic commerce merchants and on our expenses. It is critical to our success
that we continue to expend financial and management resources to develop our
brand loyalty through marketing and promotion, enhance our online personal
service infrastructure and expand our other services. As a result, we expect
that our operating expenses will increase significantly for the foreseeable
future. With increased expenses, we will need to generate significant additional
revenues to achieve profitability. Consequently, it is possible that we may
never achieve profitability, and even if we do achieve profitability, we may not
sustain or increase profitability on a quarterly or annual basis in the future.
If we do not achieve or sustain profitability in the future we will be unable to
continue our operations.
OUR QUESTION ANSWERING SERVICE IS NOVEL AND UNPROVEN.
We will be successful only if Internet users adopt our natural-language
services and popularity-based searches as their primary method of navigating the
Internet. Internet users have a
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variety of search techniques, such as search engines, available to them to
navigate the Internet. Users can also rely on methods, such as call centers,
chat rooms and e-mail, rather than difficult-to-navigate corporate Web sites, to
obtain information on products and services. It is difficult to predict the
extent and rate of user adoption of our question answering service. We cannot
assure you that widespread acceptance of our services has occured or will occur.
Visitors to our online personal service infrastructure may use it once or twice
and then revert to traditional search techniques to navigate the Internet or
choose new search techniques.
OUR METHODS OF GENERATING REVENUE ARE RELATIVELY NEW AND LARGELY UNTESTED.
We generated approximately 57%, 34%, 5% and 4% of our revenues for the year
ended December 31, 1999 through Internet advertising, licensing to corporate
customers, electronic commerce transaction fees and syndication fees for
providing Internet-wide navigation services, respectively. Revenues from
Internet advertising will make up a significant amount of our revenues for the
foreseeable future. Since the Internet advertising market is new and rapidly
evolving, we cannot yet gauge its effectiveness as compared to traditional
advertising media. Advertisers that have traditionally relied on other
advertising media may be reluctant to advertise on the Internet believing that
Internet advertising is less effective than traditional advertising media for
promoting their products and services. Consequently, they may allocate only
limited portions of their advertising budgets to Internet advertising. Our
business could be seriously harmed if Internet advertising does not continue to
grow or if we are unsuccessful in increasing our advertising revenues.
Furthermore, we rely on a third-party advertising service, provided by
DoubleClick, Inc., to deliver advertisements to our users. If DoubleClick fails
to deliver the advertisements as contracted for, due to reliability or
performance problems, or if advertisements cannot be targeted as promised to
advertisers, our revenues will decrease.
In addition, a portion of our revenues is derived from the facilitation of
electronic commerce transactions. The market for products and services purchased
online has only recently begun to develop and is rapidly changing. Therefore,
the success of our business depends upon the adoption of the Internet as a
medium for commerce by a broad base of customers. If this market fails to
develop or develops more slowly than expected, or if our electronic commerce
services do not achieve market acceptance, our business may suffer.
Furthermore, we expect sales to corporate customers to constitute a growing
percentage of our revenues. As of June 30, 2000, we had provided customized
solutions to more than 500 companies worldwide. If we cannot demonstrate to
corporate customers that our services increase the rate at which browsers become
purchasers, improve customer satisfaction on their Web sites and reduce
expensive support costs, such as those associated with call centers, our ability
to attract and retain corporate customers may be impaired. Our business would be
seriously harmed if we are unsuccessful in increasing the number of corporate
customers.
OUR ACQUISITIONS OF NET EFFECT SYSTEMS, INC., THE EVERGREEN PROJECT, INC. AND
DIRECT HIT TECHNOLOGIES, INC. AND ANY FUTURE ACQUISITIONS MAY BE DIFFICULT TO
INTEGRATE, DISRUPT OUR BUSINESS, DILUTE STOCKHOLDER VALUE OR DIVERT MANAGEMENT
ATTENTION.
We acquired Net Effect Systems, Inc. in November 1999, The Evergreen Project
Inc. in January 2000 and Direct Hit Technologies, Inc. in February 2000. We may
encounter problems associated with the assimilation of Net Effect, Evergreen and
Direct Hit including:
- difficulties in assimilation of acquired personnel, operations,
technologies or products;
- unanticipated costs associated with the acquisitions;
- diversion of management's attention from other business concerns;
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- adverse effects on our existing business relationships with our, Net
Effect, Evergreen and Direct Hit customers; and
- inability to retain employees of Net Effect, Evergreen and Direct Hit.
If we are unable to successfully integrate Net Effect, Evergreen and Direct
Hit or to create new or enhanced services, we may not achieve the anticipated
benefits from our acquisitions of Net Effect, Evergreen and Direct Hit. If we
fail to achieve the anticipated benefits from the acquisitions, we may incur
increased expenses, experience a shortfall in our anticipated revenues and we
may not obtain a satisfactory return on our investment. In addition, if any
significant number of Net Effect, Evergreen or Direct Hit employees fail to
remain employed with us, we may experience difficulties in achieving the
expected benefits of the acquisitions.
In addition, in the first quarter of 2000, we incurred a one-time charge
related to in-process research and development acquired in connection with our
recent acquisitions. Beginning with the first quarter of 2000, we also began to
amortize charges from assets acquired, including goodwill, from Evergreen and
Direct Hit. These charges are and will be significant.
As part of our business strategy, we may in the future seek to acquire or
invest in additional businesses, products or technologies that we believe could
complement or expand our business, augment our market coverage, enhance our
technical capabilities or that may otherwise offer growth opportunities. These
future acquisitions could pose the same risks to our business posed by the
acquisitions described above. In addition, with future acquisitions, we could
use substantial portions of our available cash as all or a portion of the
purchase price. We could also issue additional securities as consideration for
these acquisitions, which could cause our stockholders to suffer significant
dilution.
TO MANAGE OUR GROWTH, WE NEED TO IMPROVE OUR SYSTEMS, CONTROLS AND PROCEDURES.
We have experienced and may continue to experience rapid growth, which has
placed, and could continue to place, a significant strain on our managerial,
financial and operational resources and personnel. We expect that the number of
employees, including management-level employees, will continue to increase for
the foreseeable future. We must continue to improve our operational and
financial systems and managerial controls and procedures, and we will need to
continue to expand, as well as, train and manage our workforce. We cannot be
assured that our systems, procedures or controls will be adequate to support our
operations or that we will be able to manage any growth effectively. If we do
not manage growth effectively, our business would be seriously harmed.
OUR GROWTH WILL DEPEND ON OUR ABILITY TO DEVELOP OUR BRAND.
We believe that broader brand recognition and a favorable public perception
of the Ask Jeeves brand is essential to our future success. Accordingly, we
intend to continue pursuing an aggressive brand-enhancement strategy, which will
include mass market advertising, promotional programs and public relations
activities. We intend to continue to incur significant expenditures,
approximately $40 to $50 million for the year 2000, on these advertising and
promotional programs and activities. These expenditures may not result in a
sufficient increase in revenues to cover such advertising and promotional
expenses. In addition, even if brand recognition increases, the number of new
users and customers may not increase. Further, even if the number of new users
increases, the amount of traffic on Ask.com and DirectHit.com and the number of
our corporate customers may not increase sufficiently to justify the
expenditures. If our brand enhancement strategy is unsuccessful, these expenses
may never be recovered and we may be unable to increase future revenues.
WE MAY NOT BE ABLE TO EFFECTIVELY COMPETE AGAINST OUR CURRENT AND POTENTIAL
COMPETITORS.
We have a number of competitors for our question answering service.
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BUSINESS SOLUTIONS GROUP. We compete with a number of companies that are
addressing the same need to improve automated or online customer service for
corporate customers. For example, we compete with companies that provide
shopping advisors, such as Active Research Inc.; automated e-mail response and
live interaction, such as Kana Communications, Inc.; search technology, such as
Inktomi Corporation; and customer relationship management, such as Siebel
Systems, Inc.
WEB PROPERTIES GROUP. We face direct competition from companies that
provide Internet-wide search and directory services. For example, we compete
with search engines, including Excite@Home Corporation, Inktomi Corporation,
Google Inc. and AltaVista Company, for the traffic generated by Internet users
seeking links to third-party content to address their online information needs.
We also compete with directory services, such as Yahoo! Inc., Goto.com, Inc. and
LookSmart, Ltd. because they provide alternative ways for users to obtain the
desired information.
Our ability to compete depends on many factors, many of which are outside of
our control. These factors include: the quality of content, the ease of use of
online services, the timing and market acceptance of new and enhanced online
services and sales and marketing efforts by our competitors and by us.
Many of our existing competitors, as well as potential new competitors, have
longer operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than we do.
This may allow them to devote greater resources than we can to the development
and promotion of their services. Many of these competitors offer a wider range
of services than we do. These services may attract users to our competitors'
sites and, consequently, result in a decrease in traffic to our site. These
competitors may also engage in more extensive research and development, adopt
more aggressive pricing policies and make more attractive offers to existing and
potential corporate customers, advertisers, syndicators and electronic commerce
merchants. Our competitors may develop products and services that are equal to,
or superior to, our products and services, or achieve greater market acceptance.
In addition, current and potential competitors have established or may establish
cooperative relationships among themselves or with third parties to better
address the needs of advertisers and businesses engaged in electronic commerce.
As a result, it is possible that new competitors may emerge and rapidly acquire
significant market share.
OUR INTERNATIONAL SUBSIDIARY MAY NOT BE SUCCESSFUL.
In the fourth quarter of 1999, we formed a wholly-owned subsidiary, Ask
Jeeves International, Inc., or AJI, for the purpose of marketing our question
answering service outside of the United States. AJI entered into a joint venture
to provide our services in the United Kingdom. This expansion into international
markets will require substantial management attention and financial resources.
We cannot be certain that our investment in AJI and in establishing operations
in other countries will produce the desired levels of revenue. In addition, AJI
is subject to other inherent risks and problems, including:
- the impact of recessions in economies outside the United States;
- greater difficulty in accounts receivable collections;
- unexpected changes in regulatory requirements;
- difficulties and costs of staffing and managing foreign operations;
- reduced protection for intellectual property rights in some countries;
- political and economic instability;
- the introduction of the euro;
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- fluctuations in currency exchange rates; and
- difficulty in maintaining effective communications due to distance,
language and cultural barriers.
Some or all of the above factors could seriously harm the results of our
operations.
OUR OPERATING RESULTS ARE VOLATILE AND DIFFICULT TO PREDICT.
You should not rely on our results of operations during any particular
quarter as an indication of our future results for a full year or any other
quarter. Our quarterly revenues and operating results have varied significantly
in the past and may vary significantly in the future due to a number of factors,
including:
- our ability to obtain new corporate customers, the length of time needed
to implement our question answering service for corporate customers and
the timing of revenue recognition with respect to contracts with corporate
customers;
- our ability to obtain new advertising contracts, maintain existing ones
and effectively manage our advertising inventory;
- the number of users of Ask.com, DirectHit.com, Web sites syndicating our
services and the Web sites of our corporate customers;
- our ability to attract and retain advertisers and our ability to link our
electronic commerce merchants to potential customers;
- seasonal and other fluctuations in demand for our electronic commerce
services and for advertising space on Ask.com and DirectHit.com;
- our ability to develop and introduce new technology;
- announcements and new technology introductions by our competitors;
- our ability to attract and retain key personnel;
- costs relating to possible acquisitions and integration of technologies or
businesses;
- credit risk of internet companies within our customer base;
- rate changes for advertising on Ask.com and DirectHit.com;
- marketing expenses and technology infrastructure costs as well as other
costs that we may incur as we expand our operations; and
- the timing of charges related to the acquisitions and any amortization of
expenses related to the acquisitions.
We have experienced lower traffic during the year-end holiday season and a
slower rate of growth during the summer months. Given our limited operating
history, user traffic on our Web site is extremely difficult to forecast
accurately. Moreover, obtaining new corporate customers depends on many factors
that we are not able to control, such as the allocation of budgetary resources
by potential customers. The average sales cycle for obtaining new corporate
customers has typically ranged from two to four months. Therefore, it is
difficult to predict the number of corporate customers that we will have in the
future. We may be unable to adjust spending to compensate for an unexpected
shortfall in our revenues. In addition we expect our operating expenses to
increase as we expand our engineering, sales and marketing operations, broaden
our customer support capabilities, develop new strategic alliances, fund
increased levels of research and development and build our operational
infrastructure. As a result, if we experience an unexpected shortfall in
revenues, or if our revenues do not grow faster than the increase in these
expenses, we could experience significant variations in the operating results
from quarter to quarter.
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IF WE FAIL TO MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS AND INVESTORS, THE
MARKET PRICE OF OUR COMMON STOCK MAY DECREASE SIGNIFICANTLY.
Public market analysts and investors have not been able to develop
consistent financial models for the Internet market because of the unpredictable
rate of growth of Internet use, the rapidly changing models of doing business on
the Internet and the Internet's relatively low barriers to entry. As a result,
and because of the other risks discussed in this prospectus, it may be likely
that our actual results will not meet the expectations of public market analysts
and investors in future periods. If this occurs, the price of our common stock
will likely fall.
FAILURE TO ADD CORPORATE CUSTOMERS OR RETAIN NEW CORPORATE CUSTOMERS MAY HAVE AN
ADVERSE EFFECT ON OUR REVENUES.
We expect that revenues associated with corporate customers will be
comprised primarily of corporations with large, difficult-to-navigate Web sites.
If we do not complete sales to a sufficient number of customers, our future
revenues will be seriously harmed.
Most of our corporate customer contracts have a term of one year following
the implementation of our services. As a result, if we are unable to offer value
to our customers during the term of these contracts, or if our customers choose
a competitor's service over our service, or if such customers decide to use
their own proprietary technology to develop services similar to ours, such
customers may not renew their contracts. If we do not obtain a sufficient number
of contract renewals or if such renewal contracts are obtained on terms less
favorable than the original contract, our business could be seriously harmed.
IMPLEMENTING OUR SERVICES FOR OUR CORPORATE CUSTOMERS IS LABOR INTENSIVE.
Because the implementation of our services is labor intensive, it is
difficult to predict the length of the development cycle. Factors that affect
the length of the development cycle include the overall size and complexity of
the Web site, the interaction with the customer and the dynamic nature of the
content. Generally, it takes three to four months to launch a customized version
of our services. The long development cycle makes it difficult to predict the
delivery time to the customer, realize our revenue goals and manage our internal
hiring needs to meet new projects. In addition, in order to meet increased
demand by corporate customers, we may have to hire additional people and train
them in advance of orders. When we outsource development of custom knowledge
bases, we will have little control over the speed and quality of the
development. Any decline in the speed or quality of the implementation of our
custom services could seriously harm our business.
WE DEPEND ON THIRD-PARTY CONTENT.
Ask.com is designed to directly link users to a page within a third-party
Web site that contains the answer to a question asked. However, when Ask.com
attempts to direct the user to a page within the Web site, some companies have
automatically redirected users to their home page. If companies prevent us from
directly linking our users to a page within a third-party Web site, and if there
are no comparable alternative Web sites to which we can direct our users, the
utility and attractiveness of our services to consumers may be reduced. If this
occurs, traffic on Ask.com could significantly decrease, which would seriously
harm our business.
Visitors to Ask.com use it to obtain direct access to the information,
products and services they need through the display of a third-party Web page
containing the answer to the user's question. We have little control over the
content contained on these third-party Web sites. If these third-party Web sites
do not contain high-quality, up-to-date and useful information to the user, the
utility of our service to the user will be reduced, which could seriously harm
our business.
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WE MAY BE LIABLE FOR OUR LINKS TO THIRD-PARTY WEB SITES.
We could be exposed to liability with respect to the selection of
third-party Web sites that may be accessible through Ask.com and DirectHit.com.
These claims might include, among others, that by linking to Web sites operated
by third parties, we may be liable for copyright or trademark infringement or
other unauthorized actions by these third-party Web sites. Other claims may be
based on errors or false or misleading information provided on Ask.com,
including information deemed to constitute professional advice such as legal,
medical, financial or investment advice. Other claims may be based on our links
to sexually explicit Web sites and our provision of sexually explicit
advertisements when this content is displayed. Our business could be seriously
harmed due to the cost of investigating and defending these claims, even to the
extent these claims do not result in liability. Implementing measures to reduce
our exposure to this liability may require us to spend substantial resources and
limit the attractiveness of our service to users.
WE FACE RISKS RELATED TO EXPANDING INTO RELATIVELY NEW SERVICES AND BUSINESS
AREAS, IN PARTICULAR, ELECTRONIC COMMERCE.
To increase our revenues, we will need to expand our operations by promoting
new or complementary products and by expanding the breadth and depth of our
services. In particular, our future success will, in part, depend on our ability
to substantially increase revenues through the facilitation of electronic
commerce transactions. The market for electronic commerce services is extremely
competitive. In January 2000, we entered this market and we have little
experience in it, thus we may have limited success in this market. The expansion
of our electronic commerce services may strain our management, financial and
operational resources. Our expansion into new product and service offerings may
not be timely or may not generate sufficient revenues to offset their cost. If
this occurs, our business, operating results and financial condition will be
seriously harmed.
OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO RETAIN OUR CHIEF EXECUTIVE OFFICER.
Our future success depends, in part, on the continued service of Robert
Wrubel, our Chief Executive Officer. Mr. Wrubel is not bound by employment
agreements for any specific term. Our relationship with Mr. Wrubel is at will.
Although we are the beneficiaries of a key person life insurance policy on
Mr. Wrubel's life, the loss of his services would seriously harm our business.
OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT, RETAIN AND MOTIVATE HIGHLY
SKILLED EMPLOYEES.
Our future success also depends on our ability to attract, retain and
motivate highly skilled employees. Competition for employees in our industry is
intense. Additionally, it is often more difficult to attract employees once a
company's stock is publicly traded because the exercise price of equity awards
such as stock options are based on the public market, which is highly volatile.
We may be unable to attract, assimilate or retain other highly qualified
employees in the future. We have experienced, and we expect to continue to
experience in the future, difficulty in hiring and retaining highly skilled
employees with appropriate qualifications.
WE WILL ONLY BE ABLE TO EXECUTE OUR BUSINESS PLAN IF INTERNET USAGE GROWS.
Our business would be adversely affected if Internet usage does not continue
to grow or grows at significantly lower rates compared to current trends. The
continued growth of the Internet depends on various factors, many of which are
outside our control. These factors include:
- the Internet infrastructure may not be able to support the demands placed
on it;
- performance and reliability of the Internet may decline as usage grows;
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- security and performance concerns due to hackers and authentication
concerns with respect to the transmission over the Internet of
confidential information, such as credit card numbers, and attempts by
unauthorized computer users, so-called hackers, to penetrate online
security systems; and
- privacy concerns, including those related to the ability of Web sites to
gather user information without the user's knowledge or consent.
THE OPERATING PERFORMANCE OF OUR SYSTEMS AND SERVERS IS CRITICAL TO OUR BUSINESS
AND REPUTATION.
Any system failure, including network, software or hardware failure, that
causes an interruption in our service or a decrease in responsiveness of Ask.com
or DirectHit.com could result in reduced user traffic and reduced revenues. Our
network and server equipment for Ask.com is located at Frontier GlobalCenter in
Palo Alto, California and Exodus Communications in Sunnyvale, California. The
servers hosting our popularity engine technology are located at Exodus
Communications in Waltham, Massachusetts, Santa Clara, California, and London,
England. Additionally, some of our corporate customer Web sites are co-located
with our customers' servers at other facilities. Although we believe that our
current back-up methods are adequate, we cannot assure you that the back-up
servers will not fail or cause an interruption in our service.
We have experienced slower response times and interruptions in service due
to malfunction at our hosting facilities and on the Internet backbone networks,
major software upgrades at Ask Jeeves and undetected software defects. Ask.com
and DirectHit.com have had partial interruptions for periods ranging from a few
minutes to three hours. In addition, Ask.com and DirectHit.com could also be
affected by computer viruses, electronic break-ins or other similar disruptions.
If we experience outages, frequent or persistent system failures or degraded
response times, our reputation and brand could be permanently harmed. In
addition, we could lose advertising revenues during these interruptions and user
satisfaction could be negatively impacted if the service is slow or unavailable.
Our users and customers depend on Internet service providers, online service
providers and other Web site operators for access to Ask.com and DirectHit.com.
Each of these providers has experienced significant outages in the past and
could experience outages, delays and other difficulties due to system failures
unrelated to our systems.
The occurrence of an earthquake or other natural disaster or unanticipated
problems at our principal facilities or at the servers that host or back-up our
systems could cause interruptions or delays in our interactive network or a loss
of data. Our systems are vulnerable to damage or interruption from fire, flood,
power loss, telecommunications failure, break-ins, earthquake and similar
events. Our general liability insurance policies may not adequately compensate
us for losses that may occur due to interruptions in our service.
OUR SECURITY COULD BE BREACHED, WHICH COULD DAMAGE OUR REPUTATION AND DETER
CUSTOMERS FROM USING OUR SERVICES
We must protect our computer systems and network from physical break-ins,
security breaches and other disruptive problems caused by the Internet or other
users. Computer break-ins could jeopardize the security of information stored in
and transmitted through our computer systems and network, which could adversely
affect our ability to retain or attract customers, damage our reputation and
subject us to litigation. We could be subject to denial of service, vandalism
and other attacks on its systems by Internet hackers. Although we intend to
continue to implement security technology and establish operational procedures
to prevent break-ins, damage and failures, these security measures may fail. Our
insurance coverage in certain circumstances may be insufficient to cover issues
that may result from such events.
12
<PAGE>
WE MAY NOT BE ABLE TO ADAPT TO EVOLVING INTERNET TECHNOLOGIES AND CUSTOMER
DEMANDS.
To be successful, we must adapt to rapidly changing Internet technologies by
continually enhancing our products and services and introducing new services to
address our customers' changing needs. We could incur substantial development or
acquisition costs if we need to modify our services or infrastructure to adapt
to changes affecting providers of Internet services. Our business could be
seriously harmed if we incur significant costs to adapt to these changes. If we
cannot adapt to these changes, or do not sufficiently increase the features and
functionality of our products and services, our customers may switch to the
product and service offerings of our competitors. Furthermore, our competitors
or potential competitors may develop a novel method of Internet navigation that
is equal or superior to those we offer. As a result, demand for our online
personal service infrastructure may decrease.
WE MAY FACE POTENTIAL LIABILITY FOR INVASION OF PRIVACY.
We have a policy against using personally identifiable information obtained
from users of our online personal service infrastructure without the user's
permission. In the past, the Federal Trade Commission has investigated companies
that have used personally identifiable information without permission or in
violation of a stated privacy policy. If we use this information without
permission or in violation of our policy, we may face potential liability for
invasion of privacy for compiling and providing information to our corporate
customers and electronic commerce merchants.
WE NEED TO EXPAND OUR SALES AND SUPPORT ORGANIZATIONS.
We will continue to expand our advertising sales, syndication and corporate
sales operations and marketing efforts to increase market awareness and sales of
our products and services. We will need to increase our staff to support new
customers and the expanding needs of our existing customers. Competition for
highly-qualified sales personnel is intense, and we may not be able to hire the
kind and number of sales personnel we are targeting. Hiring highly-qualified
customer service and account management personnel is very competitive in our
industry due to the limited number of people available with the necessary
technical skills and understanding of the Internet.
THE INTEGRATION OF NEW MANAGEMENT PERSONNEL MAY INTERFERE WITH OUR OPERATIONS
We have recently hired new management personnel, including a new President
and Chief Financial Officer. To integrate into Ask Jeeves, these individuals
must spend a significant amount of time learning our business model and
management system in addition to performing their regular duties. Accordingly,
the integration of new personnel has resulted and will continue to result in
some disruption to our ongoing operations.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES COULD HARM OUR BUSINESS.
Any new law or regulation pertaining to the Internet, or the application or
interpretation of existing laws, could decrease the demand for our services,
increase our cost of doing business or otherwise seriously harm our business.
There is, and will likely continue to be, an increasing number of laws and
regulations pertaining to the Internet. These laws or regulations may relate to
liability for information retrieved from or transmitted over the Internet,
online content regulation, user privacy, taxation and the quality of products
and services. Furthermore, the growth and development of electronic commerce may
prompt calls for more stringent consumer protection laws that may impose
additional burdens on electronic commerce companies as well as companies like us
that provide electronic commerce services.
We file tax returns in such states as required by law based on principles
applicable to traditional businesses. However, one or more states could seek to
impose additional income tax obligations or sales tax collection obligations on
out-of-state companies, such as ours, which
13
<PAGE>
engage in or facilitate electronic commerce. A number of proposals have been
made at state and local levels that could impose such taxes on the sale of
products and services through the Internet or the income derived from such
sales. Such proposals, if adopted, could substantially impair the growth of
electronic commerce and seriously harm our profitability.
Legislation limiting the ability of the states to impose taxes on
Internet-based transactions recently has been enacted by the United States
Congress. However, this legislation, known as the Internet Tax Freedom Act,
imposes only a three-year moratorium, which commenced October 1, 1998 and ends
on October 21, 2001, on state and local taxes on electronic commerce, where such
taxes are discriminatory and Internet access, unless such taxes were generally
imposed and actually enforced prior to October 1, 1998. It is possible that the
tax moratorium could fail to be renewed prior to October 21, 2001. Failure to
renew this legislation would allow various states to impose taxes on
Internet-based commerce. The imposition of such taxes could seriously harm our
ability to become profitable.
In addition, we are not certain how our business may be affected by the
application of existing laws governing issues such as property ownership,
copyrights, encryption and other intellectual property issues, taxation, libel,
obscenity and export or import matters. The vast majority of such laws were
adopted prior to the advent of the Internet. As a result, they do not
contemplate or address the unique issues of the Internet and related
technologies. Changes in laws intended to address such issues could create
uncertainty in the Internet market. Such uncertainty could reduce demand for our
services or increase the cost of doing business as a result of litigation costs
or increased service delivery costs.
WE MAY FACE POTENTIAL ELECTRONIC COMMERCE-RELATED LIABILITIES AND EXPENSES.
Arrangements with electronic commerce merchants may expose us to legal risks
and uncertainties, including potential liabilities to consumers of the products
and services offered by these electronic commerce merchants. Although we carry
general liability insurance, our insurance may not cover potential claims of
this type or may not be adequate to indemnify us for all liability that may be
imposed.
Some of the risks that may result from these arrangements with businesses
engaged in electronic commerce include:
- potential liabilities for illegal activities that may be conducted by
participating merchants;
- product liability or other tort claims relating to goods or services sold
through third-party commerce sites;
- consumer fraud and false or deceptive advertising or sales practices;
- breach of contract claims relating to merchant transactions;
- claims that materials included in merchant sites or sold by merchants
through these sites infringe third-party patents, copyrights, trademarks
or other intellectual property rights, or are libelous, defamatory or in
breach of third-party confidentiality or privacy rights; and
- claims relating to any failure of merchants to appropriately collect and
remit sales or other taxes arising from electronic commerce transactions.
14
<PAGE>
Even to the extent that such claims do not result in material liability,
investigating and defending such claims could seriously harm our business.
WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS AND WE MAY BE
LIABLE FOR INFRINGING THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
Third parties may infringe or misappropriate our patents, trademarks or
other proprietary rights, which could have a material adverse effect on our
business. We have applied for a patent on our "Grammar Template Query System"
with the United States Patent and Trademark Office. We have obtained registered
trademark status for "Ask Jeeves" in the United States, Tunisia and Norway. We
have also applied for registered trademark status for "Ask.com," "Ask Jeeves for
Kids," and our logo and service marks in the United States and various foreign
countries. Additionally, in connection with our acquisition of Direct Hit, we
received an assignment of one United States patent issued to Gary Culliss,
Direct Hit's co-founder, Chief Technology Officer and Chairman, covering aspects
of Direct Hit's technology, and three U.S. patent applications covering other
aspects of Direct Hit's technology. We do not know whether we will be able to
defend our proprietary rights since the validity, enforceability and scope of
protection of proprietary rights in Internet-related industries are uncertain
and still evolving. Because we are devoting significant resources to building
our brands, primarily "Ask Jeeves" and "Ask.com," through media advertising
campaigns, if we are unable to register the trade and service marks for which we
have applied, or if we are unable to defend our intellectual property rights,
our business may be seriously harmed.
In July 1999, IP Learn LLC filed a complaint against us in the United States
District Court for the Northern District of California, which was amended by the
plaintiff, which alleges that aspects of the Ask Jeeves technology infringe one
or more patents alleged to be held by the plaintiff. We have answered the
complaint and discovery has begun. Additionally, in December 1999, Patrick H.
Winston and Boris Katz filed a complaint against us in the United States
District Court for the District of Massachusetts. The complaint alleges that our
technology infringes two patents alleged to be held by the plaintiffs. We have
answered the complaint, but discovery has not begun. We intend to vigorously
defend against the allegations asserted in these complaints and we believe we
have meritorious defenses to the claims. The results of any litigation matter
are inherently uncertain. In the event of an adverse result in either of these
lawsuits, or in any other litigation with third parties that could arise in the
future with respect to intellectual property rights relevant to our products or
services, we could be required to pay substantial damages, including treble
damages if we are held to have willfully infringed, to cease the use of
infringing products or services, to expend significant resources to develop
non-infringing technology or to attempt to obtain licenses to the infringing
technology on commercially reasonable terms, if at all. In addition, litigation
frequently involves substantial expenditures and can require significant
management attention, even if we ultimately prevail. Accordingly, we cannot
assure you that these lawsuits will not seriously harm our business.
Third parties may assert infringement claims against us. From time to time
in the ordinary course of business we have been, and we expect to continue to
be, subject to claims of alleged infringement of the trademarks and other
intellectual property rights of third parties. These claims and any resultant
litigation, should it occur, could subject us to significant liability for
damages. In addition, even if we prevail, litigation could be time-consuming and
expensive to defend, and could result in the diversion of our time and
attention. Any claims from third parties may also result in limitations on our
ability to use the intellectual property subject to these claims unless we are
able to enter into agreements with the third parties making these claims.
WE MAY NOT BE ABLE TO SECURE ADDITIONAL FINANCING TO MEET OUR FUTURE CAPITAL
NEEDS.
We currently anticipate that our available cash resources will be sufficient
to meet our anticipated needs for working capital and capital expenditures for
at least twelve months following
15
<PAGE>
the date of this prospectus. If we are unable to generate sufficient cash flows
from operations to meet our anticipated needs for working capital and capital
expenditures, we will need to raise additional funds to fund brand promotion,
develop new or enhanced services, respond to competitive pressures or make
acquisitions. We may be unable to obtain any required additional financing on
terms favorable to us, if at all. If adequate funds are not available on
acceptable terms, we may be unable to fund our expansion, successfully promote
our brand, develop or enhance services, respond to competitive pressures or take
advantage of acquisition opportunities, any of which could seriously harm our
business. If we raise additional funds through the issuance of equity
securities, our stockholders may experience dilution of their ownership
interest, and the newly-issued securities may have rights superior to those of
the common stock. If we raise additional funds by issuing debt, we may be
subject to limitations on our operations, including limitations on the payment
of dividends.
PROVISIONS IN DELAWARE LAW AND OUR CHARTER, STOCK OPTION AGREEMENTS AND OFFER
LETTERS TO EXECUTIVE OFFICERS MAY PREVENT OR DELAY A CHANGE OF CONTROL.
We are subject to the Delaware anti-takeover laws regulating corporate
takeovers. These anti-takeover laws prevent Delaware corporations from engaging
in a merger or sale of more than 10% of its assets with any stockholder,
including all affiliates and associates of the stockholder, who owns 15% or more
of the corporation's outstanding voting stock, for three years following the
date that the stockholder acquired 15% or more of the corporation's assets
unless:
- the board of directors approved the transaction where the stockholder
acquired 15% or more of the corporation's assets;
- after the transaction where the stockholder acquired 15% or more of the
corporation's assets, the stockholder owned at least 85% of the
corporation's outstanding voting stock, excluding shares owned by
directors, officers and employee stock plans in which employee
participants do not have the right to determine confidentially whether
shares held under the plan will be tendered in a tender or exchange offer;
or
- on or after this date, the merger or sale is approved by the board of
directors and the holders of at least two-thirds of the outstanding voting
stock that is not owned by the stockholder.
A Delaware corporation may opt out of the Delaware anti-takeover laws if its
certificate of incorporation or bylaws so provide. We have not opted out of the
provisions of the anti-takeover laws. As such, these laws could prohibit or
delay mergers or other takeover or change of control of Ask Jeeves and may
discourage attempts by other companies to acquire us.
Our certificate of incorporation and bylaws include a number of provisions
that may deter or impede hostile takeovers or changes of control or management.
These provisions include:
- our board is classified into three classes of directors as nearly equal in
size as possible with staggered three year-terms;
- the authority of our board to issue up to 5,000,000 shares of preferred
stock and to determine the price, rights, preferences and privileges of
these shares, without stockholder approval;
- all stockholder actions must be effected at a duly called meeting of
stockholders and not by written consent;
- special meetings of the stockholders may be called only by the chairman of
the board, the chief executive officer or the board; and
- no cumulative voting.
These provisions may have the effect of delaying or preventing a change of
control.
16
<PAGE>
Our certificate of incorporation and bylaws provide that we will indemnify
officers and directors against losses that may incur in investigations and legal
proceedings resulting from their services to us, which may include services in
connection with takeover defense measures. These provisions may have the effect
of preventing changes in our management.
In addition, our option agreements under the 1996 Stock Option plan provide
that if a change of control of Ask Jeeves occurs prior to the first anniversary
of the vesting commencement date of an option, then the vesting which would have
occurred by such anniversary shall occur. After the first anniversary of the
date of grant, these option agreements provide that the vesting of each option
shall accelerate by six months upon a change of control. As of June 1, 2000,
there were 2,534,608 shares of common stock reserved for unvested options
granted under this plan. Furthermore, offer letters with our executive officers
provide for the payment of severance and acceleration of options upon the
termination of these executive officers following a change of control of Ask
Jeeves. These provisions in our stock option agreements and offer letters could
have the effect of discouraging potential takeover attempts.
ASK JEEVES' STOCK PRICE MAY FLUCTUATE SIGNIFICANTLY REGARDLESS OF ASK JEEVES'
ACTUAL OPERATING PERFORMANCE.
Ask Jeeves common stock is listed for trading on the Nasdaq National Market.
The trading price of Ask Jeeves common stock may be highly volatile. Ask Jeeves'
stock price may be subject to wide fluctuations in response to a variety of
factors, including:
- actual or anticipated variations in quarterly operating results and
announcements of technological innovations;
- new products or services offered by Ask Jeeves or its competitors;
- changes in financial estimates by securities analysts;
- conditions or trends in the Internet services industry and the online
customer service segment in particular;
- Ask Jeeves' announcement of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;
- additions or departures of key personnel;
- sales of common stock; and
- other events that may be beyond Ask Jeeves' control.
In addition, the Nasdaq National Market, where most publicly-held Internet
companies are traded, has recently experienced extreme price and volume
fluctuations. These fluctuations often have been unrelated or disproportionate
to the operating performance of these companies. These broad market and industry
factors may materially adversely affect the market price of Ask Jeeves' common
stock, regardless of Ask Jeeves' actual operating performance. In the past,
following periods of volatility in the market price of an individual company's
securities, securities class action litigation often has been instituted against
that company. This type of litigation, if instituted, could result in
substantial costs and a diversion of management's attention and resources.
FUTURE SALES OF STOCK COULD AFFECT OUR STOCK PRICE
If our stockholders sell substantial amounts of our common stock, including
shares issued upon the exercise of outstanding options, in the public market,
the market price of our common stock could fall. In particular, in July 2000,
the lockup agreement executed by various of our affiliates elapsed. Such
stockholders are eligible to sell all vested shares. These sales also might make
it more difficult for us to sell equity or equity-related securities in the
future at a time and price that we deem appropriate.
17
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and elsewhere in this prospectus or incorporated by
reference constitute forward-looking statements. These statements involve known
and unknown risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among other things, those listed under "Risk Factors" and
elsewhere in this prospectus.
In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "could," "expects," "plans," "intends,"
"anticipates," "believes," "estimates," "predicts," "potential" or "continue" or
the negative of such terms and other comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.
USE OF PROCEEDS
We will not receive any proceeds from sales, if any, of our common stock by
the selling stockholders. The purpose of this offering is to register our common
stock for resale by the selling stockholders.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our capital stock. We
presently intend to retain future earnings, if any, to finance the expansion of
our business, and we do not expect to pay any cash dividends in the foreseeable
future.
18
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth information with respect to beneficial
ownership of our common stock as of June 1, 2000:
- each person or entity known by us to beneficially own more than 5% of our
outstanding common stock;
- each of our directors;
- each of the executive officers listed in the Summary Compensation Table;
- all of our directors and executive officers as a group; and
- each of the selling stockholders.
The information provided in the table below with respect to each selling
stockholder has been obtained from such selling stockholders. Upon completion of
the offering, certain selling stockholders will have sold their entire
beneficial ownership of our common stock.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AFTER
NUMBER OF SHARES NUMBER OF THIS OFFERING
BENEFICIALLY SHARES BEING -----------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS OWNED(1) PERCENTAGE OFFERED NUMBER PERCENTAGE
------------------------------------- ---------------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
CPQ Holding, Inc.(2)
529 Bryant Street,
Palo Alto CA 94301................ 2,774,856 7.78% -- 2,774,856 7.78%
Entities affiliated with
Highland Capital Partners, Inc.(3)
Two International Place,
Boston, MA 02110.................. 2,310,322 6.48 -- 2,310,322 6.48
Entities affiliated with
Institutional Venture Partners(4)
3000 Sand Hill Rd,
Building Two, Suite 290,
Menlo Park, CA 94025.............. 1,386,193 3.89 -- 1,386,193 3.89
Roda Group Investments
Fund I, L.L.C.(5) ..............
918 Parker Street,
Berkeley, CA 94710................ 856,732 2.40 -- 856,732 2.40
Roger A. Strauch(6)................. 2,814,037 7.89 -- 2,814,037 7.89
A. George (Skip) Battle(7).......... 161,625 * -- 161,625 *
Garrett Gruener(8).................. 2,633,546 7.38 -- 2,633,546 7.38
Daniel H. Miller(9)................. 2,849,456 7.99 -- 2,849,456 7.99
Daniel J. Nova(3)................... 2,310,322 6.48 -- 2,310,322 6.48
Benjamin M. Rosen(2)................ 1,345,208 3.77 -- 1,345,208 3.77
Geoffrey Y. Yang(4)................. 1,386,193 3.89 -- 1,386,193 3.89
Edward D. Briscoe III(10)........... 638,302 1.79 -- 638,302 1.79
Laurence G. Fishkin(11)............. 123,937 * -- 123,937 *
Thomas Low.......................... 62,498 * 62,498 *
Frank A. Vaculin(12)................ 204,620 * -- 204,620 *
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AFTER
NUMBER OF SHARES NUMBER OF THIS OFFERING
BENEFICIALLY SHARES BEING -----------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS OWNED(1) PERCENTAGE OFFERED NUMBER PERCENTAGE
------------------------------------- ---------------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
David C. Warthen(13)................ 943,397 2.62% -- 943,397 2.62%
Robert W. Wrubel(14)................ 759,441 2.11 -- 759,441 2.11
All directors and executive officers
as a group (16 persons)(15)...... 12,875,576 35.18% -- 12,875,576 35.18%
631465 Alberta Ltd.(16)............. 50,930 * 12,329 38,601 *
Advent Atlantic and Pacific III
L.P............................... 110,069 * 110,069 -- *
Alpert Living Trust dated 1/21/98... 10,483 * 10,483 -- *
David Andre......................... 22,740 * 22,790 -- *
Brian Aspland....................... 1,105 * 1,105 -- *
Bank of Tokyo-Mitsubishi, Ltd....... 4,422 * 4,422 -- *
Bayview 99 I, LP.................... 9,635 * 9,635 -- *
Bayview 99 II, LP................... 8,075 * 8,075 -- *
Bear, Stearns International
Limited(17)....................... 100,000 * 100,000 -- *
W. Andrew Beckstoffer............... 2,211 * 2,211 -- *
Big Trees Partners.................. 5,537 * 5,537 -- *
Bradley Holdings, Ltd............... 8,844 * 8,844 -- *
Nathan Brown(18).................... 8,545 * 6,837 1,708 *
BV Middle East, Ltd................. 8,638 * 8,638 -- *
Cameron Trust....................... 1,459 * 1,459 -- *
Capital Asia International Limited... 5,969 * 5,969 -- *
Carrara Venture Fund, Ltd........... 4,422 * 4,422 -- *
Maurice Casey(19)................... 15,952 * 2,477 13,475 *
Michael Cassidy..................... 468,569 1.31 468,569 -- *
CCV II Associates L.P............... 3,709 * 3,332 377 *
David Christopherson as Trustee of
The Culliss Family Irrevocable
Chidlren's Trust under indenture of
trust dated December 30, 1999..... 2,000 * 2,000 -- *
CI Venture Capital.................. 4,422 * 4,422 -- *
Arthur A. Ciocca Living Trust....... 4,422 * 4,422 -- *
Commonwealth Capital Ventures II
L.P............................... 67,412 * 67,412 -- *
Charles H. Cooper, Jr............... 720 * 661 59 *
Lisa Corbett........................ 993 * 993 -- *
Cornerstone Equities LLC............ 19,199 * 19,199 -- *
Crescent International Holdings
Limited........................... 22,109 * 22,109 -- *
Gary Culliss........................ 925,211 * 925,211 -- *
Thomas Curran, Jr.(20).............. 103,276 * 68,011 35,205 *
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AFTER
NUMBER OF SHARES NUMBER OF THIS OFFERING
BENEFICIALLY SHARES BEING -----------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS OWNED(1) PERCENTAGE OFFERED NUMBER PERCENTAGE
------------------------------------- ---------------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
John Andrew Curtis.................. 1,277 * 1,277 -- *
Michael E. & Yvonne B. Deggelman.... 1,105 * 1,105 -- *
David Do............................ 1,367 * 1,367 -- *
Donald C. Doolittle................. 2,211 * 2,211 -- *
Draper Fisher Associates Fund IV,
LP................................ 1,203,842 3.38% 1,189,255 14,587 *
Draper Fisher Partners IV, LLC...... 90,612 * 89,513 1,099 *
Drebes Family Trust................. 42,849 * 42,849 -- *
DS Capital, LLC..................... 9,599 * 9,599 -- *
Herbert M. Dwight, Jr., Trustee..... 1,105 * 1,105 -- *
D-W Investments, L.P................ 5,759 * 5,759 -- *
Wayne L. Earl and Judith V. Earl
Trust............................. 1,105 * 1,105 -- *
Rex H. Elliot....................... 720 * 661 59 *
Fenton Family Trust................. 21,799 * 21,799 -- *
Tod H. Francis...................... 6,278 * 6,278 -- *
Fremont Sequoia Holding, LLP........ 144,173 * 144,173 -- *
Fremont TVL V Partners L.P.......... 9,705 * 9,705 -- *
Richard N. Frank Living Trust....... 1,105 * 1,105 -- *
Rod and Connie Georgiu.............. 2,211 * 2,211 -- *
Stephanie Beckwith Gies............. 6,837 * 6,837 -- *
Kevin E. Grant...................... 1,105 * 1,105 -- *
Gweneth H. Glessner................. 303 * 308 -- *
Greylock IX Limited Partnership..... 574,408 1.61 574,408 -- *
Nabil Hachem........................ 113 * 113 -- *
Robert Hagopian(21)................. 3,418 * 3,418 -- *
Hallco, Inc......................... 4,422 * 4,422 -- *
Laura Hanff(22)..................... 77 * 77 -- *
Jay Harati.......................... 534 * 534 -- *
Harbour Vest VI Ltd................. 22,109 * 22,109 -- *
Tom Harrison(23).................... 63,924 * 61,788 2,136 *
Warner W. Henry, Trustee............ 4,422 * 4,422 -- *
Douglas J. Herst, Co-Trustee........ 1,105 * 1,105 -- *
Hitachi, Ltd........................ 4,422 * 4,422 -- *
Bill Hsieh(24)...................... 3,525 * 3,205 320 *
Hikari Tsushin, Inc................. 4,069 * 4,069 -- *
Leigh Ishikawa(25).................. 752 * 422 330 *
Soren Jacobsen...................... 2,500 * 2,500 -- *
Randal A. Johnson................... 4,623 * 4,623 -- *
Paul C. Keinath..................... 331 * 331 -- *
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AFTER
NUMBER OF SHARES NUMBER OF THIS OFFERING
BENEFICIALLY SHARES BEING -----------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS OWNED(1) PERCENTAGE OFFERED NUMBER PERCENTAGE
------------------------------------- ---------------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Kenneth Van Wagenen Trust........... 6,164 * 6,164 -- *
J. Bradford King(26)................ 20,984 * 20,984 -- *
King Living Trust U/A/D June 9,
1989.............................. 96,840 * 96,840 -- *
Vincent Laiosa(27).................. 20,511 * 17,092 3,419 *
Ilene Lang.......................... 11,181 * 11,181 -- *
Claude C. Laval, III & Betty Lou
Laval Family Trust................ 1,105 * 1,105 -- *
Lederer-Orr Family Trust............ 23,010 * 23,010 -- *
Paul G. Lego........................ 1,105 * 1,105 -- *
Gary Levenson(28)................... 6,837 * 3,418 3,419 *
Alan Levin(29)...................... 6,217 * 3,418 2,799 *
Mark S. Manasse..................... 277 * 277 -- *
Media First Public Relations, Inc.... 2,465 * 2,465 -- *
McCloskey 1996 GRAT 5............... 19,199 * 19,199 -- *
Miami Corp.......................... 8,844 * 8,844 -- *
Michael E. McFall................... 119,296 * 119,296 -- *
Milam Knecht and Company............ 2,465 * 2,465 -- *
Mosaic Venture Partners, L.P........ 220,054 * 220,054 -- *
Harold Naparst Harold Naparst Trust
2000.............................. 1,105 * 1,105 -- *
NeoCarta Scout Fund, L.L.C.......... 7,680 * 7,680 -- *
NeoCarta Ventures, L.P.............. 69,117 * 69,117 -- *
Nierenberg Family Trust............. 867 * 867 -- *
O'Brien Family Trust U/T/A dtd.
7/1/92............................ 3,173 * 3,173 -- *
Judith M. O'Brien Custodian Connor
O'Brien........................... 123 * 123 -- *
Judith M. O'Brien Custodian Lauren
O'Brien........................... 123 * 123 -- *
John A. O'Donnell................... 1,105 * 1,105 -- *
Ohawine Trust....................... 2,918 * 2,918 -- *
Old Dominion University Research
Foundation........................ 393 * 393 -- *
David Parker(30).................... 63,241 * 52,883 10,358 *
Bruce Pennypacker(31)............... 17,092 * 17,092 -- *
Pente Venture Trust................. 1,481 * 1,481 -- *
P-J Investments..................... 5,759 * 5,759 -- *
Private Equity Partners, LLC........ 1,030 * 1,030 -- *
Q Financial Group, LLC.............. 18,494 * 18,494 -- *
Quinn Family Trust.................. 1,105 * 1,105 -- *
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AFTER
NUMBER OF SHARES NUMBER OF THIS OFFERING
BENEFICIALLY SHARES BEING -----------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS OWNED(1) PERCENTAGE OFFERED NUMBER PERCENTAGE
------------------------------------- ---------------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Frank Rees, Trustee Rees Family
Trust............................. 1,768 * 1,768 -- *
R.E.K. Profit Sharing Trust FBO
Robert E. King.................... 9,543 * 9,543 -- *
Daniel Rowe(32)..................... 87,902 * 73,925 13,977 *
San Francisco International
Investors......................... 12,329 * 12,329 -- *
Michael Santullo.................... 47,071 * 46,680 391 *
Paul D. Schaller.................... 24,659 * 24,659 -- *
Gordon Scherer...................... 1,327 * 1,327 -- *
Elizabeth A. Schwartz and William J.
Schwartz.......................... 31,396 * 18,896 12,500 *
A. Horton Shapiro and Elizabeth
Shapiro, Trustee Shapiro Family
Trust............................. 1,105 * 1,105 -- *
George O. Sheldon, Trustee.......... 1,105 * 1,105 -- *
Shennan Family Partnership.......... 2,946 * 2,946 -- *
Shennan 1995 Trust.................. 19,198 * 19,198 -- *
James Simpson....................... 1,105 * 1,105 -- *
Stanford University(33)............. 65,839 * 14,794 51,045 *
Hilary Steinert..................... 1,595 * 1,595 -- *
Edith R. Stern Trust FBO Mr. Lessing
Stern............................. 2,211 * 2,211 -- *
Peter W. Stott...................... 2,211 * 2,211 -- *
Carl Sturmer(34).................... 12,716 * 12,329 367 *
Christine L. Surowiec............... 2,937 * 2,937 -- *
Sutro Group......................... 2,211 * 2,211 -- *
Suwannukul Family Trust............. 4,422 * 4,422 -- *
TA Executives Fund LLC.............. 4,548 * 4,548 -- *
TA Investors LLC.................... 4,764 * 4,764 -- *
TA/Advent VIII L.P.................. 238,801 * 238,801 -- *
Augustus Tai........................ 1,918 * 1,918 -- *
Jason Temple(35).................... 5,127 * 5,127 -- *
Thanksgiving Foundation............. 2,918 * 2,918 -- *
TL Ventures III Interfund L.P....... 7,008 * 7,008 -- *
TL Ventures III L.P................. 214,645 * 214,645 -- *
TL Ventures III Offshore L.P........ 44,930 * 44,930 -- *
TVL Management Corporation.......... 33 * 33 -- *
Union Fidelity Life Insurance
Company........................... 6,633 * 6,633 -- *
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AFTER
NUMBER OF SHARES NUMBER OF THIS OFFERING
BENEFICIALLY SHARES BEING -----------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS OWNED(1) PERCENTAGE OFFERED NUMBER PERCENTAGE
------------------------------------- ---------------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Michele Valentine................... 35 * 35 -- *
Steve Victorino..................... 6,269 * 6,269 -- *
Viventures Partners................. 76,797 * 76,797 -- *
Maurice Werdegar.................... 1,105 * 1,105 -- *
Diane Wilsey........................ 1,094 * 1,094 -- *
Woodside Electronics Corp. Pension
and Profit Sharing Trust, Wayne
Earl, Trustee..................... 1,105 * 1,105 -- *
WS Investment 99A................... 1,666 * 1,666 -- *
WS Investment Company 97B........... 6,164 * 6,164 -- *
Judith B. Wunderlich Trust.......... 312 * 312 -- *
Robert Wyse......................... 2,465 * 2,465 -- *
Steven Yang(36)..................... 89,450 * 86,450 -- *
Aaron Zallen........................ 2,279 * 2,279 -- *
Total shares offered.............. 5,961,973
</TABLE>
------------------------
* Represents beneficial ownership of less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment power
with respect to the securities. Common stock subject to options or warrants
that are currently exercisable or exercisable within 60 days of June 1,
2000 are deemed to be outstanding and to be beneficially owned by the
person holding such options or warrants for the purpose of computing the
percentage ownership of such person, but are not treated as outstanding for
the purpose of computing the percentage ownership of any other person.
Unless otherwise indicated, the address for each of the individuals listed
in the table is c/o Ask Jeeves, 5858 Horton St., Suite 350, Emeryville,
California 94608. Unless otherwise indicated by footnote, the persons named
in the table have sole voting and sole investment power with respect to all
shares of common stock shown as beneficially owned by them, subject to
applicable community property laws. Percentage of beneficial ownership is
based on 35,666,062 shares of common stock outstanding as of June 1, 2000
including 4,751,878 shares issued in the Direct Hit acquisition and
1,715,000 shares issued pursuant to our public offering effective
March 13, 2000.
(2) Benjamin M. Rosen is Chairman of the Board of Compaq Computer Corporation
of which CPQ Holdings, Inc. is a wholly-owned subsidiary.
(3) Highland Capital Partners, Inc. manages Highland Capital Partners IV
Limited Partnership (HCP IV) and Highland Entrepreneurs' Fund IV Limited
Partnership (HEF IV, and together with HCP IV, the Highland Entities).
Includes 2,217,909 shares of common stock owned by HCP IV and
92,413 shares of common stock owned by HEF IV. Daniel J. Nova, a director
of Ask Jeeves, is a general partner of the General Partner of the Highland
Entities and can be deemed to be a beneficial owner of the shares held by
HCP IV and HEF IV as he has shared voting and investment power in
connection with his role as general partner.
(4) Institutional Venture Partners manages Institutional Venture
Partners VIII, L.P. (IVP) and IVP Institutional Investment Fund, III, LLC
(IIF, and together with IVP, the "Institutional Entities").
24
<PAGE>
Includes 1,365,400 shares of common stock owned by IVP and 20,793 shares of
common stock owned by IIF. Geoffrey Y. Yang, a director of Ask Jeeves, is a
general partner of the Institutional Entities and can be deemed to be a
beneficial owner of the shares held by IVP and IIF as he has shared voting
and investment power in connection with his role as general partner.
(5) Roger A. Strauch and Daniel H. Miller are managing members, and Garrett
Gruener is a member of Roda Group Investment Fund I, L.L.C.
(6) Includes 1,854,477 shares held by the Strauch Kulhanjian Family Trust UAD
December 3, 1992. Also includes 856,732 shares held by Roda Group
Investment Fund I, L.L.C., of which Mr. Strauch is a managing member and as
to which he disclaims beneficial ownership except to the extent of his pro
rata investment in such shares. Also includes 1,500 shares held by Benno
S.M. Kling Educational Trust, Roger A. Strauch, Trustee, 1,500 shares held
by Samuel J.M. Kling Educational Trust, Roger A. Strauch, Trustee, 1,500
shares held by Jesse Kling Educational Trust, Roger A. Strauch, Trustee,
1,500 shares held by Rebecca A. Miller Educational Trust, Roger A. Strauch,
Trustee, 1,500 shares held by Sarah Miller Educational Trust, Roger A.
Strauch, Trustee, 1,500 shares held by Julia F. Dan Educational Trust,
Roger A. Strauch, Trustee, 1,500 shares held by Kalden Gonsar Educational
Trust, Roger A. Strauch, Trustee, 1,500 shares held by Fletcher Kennamer
Educational Trust, Roger A. Strauch, Trustee, 1,500 shares held by Aidan
Clements Educational Trust, Roger A. Strauch, Trustee, 15,000 shares held
by Cooper Ogden Miller Educational Trust, Roger A. Strauch, Trustee, 45,812
shares held by Roger Strauch as Custodian under CUTMA for Alexander K.
Strauch, 45,812 shares held by Roger Strauch as Custodian under CUTMA for
Paul K. Strauch and 45,813 shares held by Roger Strauch as Custodian under
CUTMA for Nairi S. Strauch as to which Mr. Strauch disclaims beneficial
ownership.
(7) Includes 27,499 shares which are subject to a right of repurchase by Ask
Jeeves, 6,847 shares held by A. George Battle Custodian Emily Taylor Battle
UTMA IL, 4,847 shares held by A. George Battle TTEE UA Daniel Kurt Webster
Battle Trust and 2,500 shares held by Daniel Kurt Webster Battle, as to
which Mr. Battle disclaims beneficial ownership.
(8) Includes 86,232 shares held by the Amy Slater Revocable Trust, Amy Slater,
trustee, 3,751 shares issuable to Ms. Slater pursuant to options
exercisable within 60 days, 1,000 shares held by Ms. Slater as custodian
under CUTMA for Zachary A. Adams, 1,000 shares held by Ms. Slater as
custodian under CUTMA for Caleb J. Adams, of which Ms. Slater disclaims
beneficial ownership, 856,732 shares held by Roda Group Investment Fund I,
L.L.C., 100,000 shares held in the Garrett Gruener Annuity Trust and
250 shares held by Lindsey Pitman, Garrett Gruener custodian. Amy Slater is
the spouse of Mr. Gruener. Mr. Gruener, a director of Ask Jeeves, is a
member of Roda Group Investments Fund I, L.L.C and disclaims beneficial
ownership of the shares held by such entity.
(9) Includes 1,997,724 shares held by Mr. Miller. Also includes 856,732 shares
held by Roda Group Investment Fund I, L.L.C., of which he is a managing
member, and as to which Mr. Strauch disclaims beneficial ownership. Also
includes 15,000 shares held by Cooper Ogden Miller Educational Trust, Roger
A. Strauch, Trustee, as to which Mr. Miller disclaims beneficial ownership.
(10) Includes 280,734 shares subject to a right of repurchase by Ask Jeeves and
2,600 shares issuable pursuant to options exercisable within 60 days.
(11) Includes 49,215 shares issuable pursuant to options exercisable within 60
days.
(12) Includes 49,938 shares subject to a right of repurchase by Ask Jeeves and
69,228 shares issuable pursuant to options exercisable within 60 days.
25
<PAGE>
(13) Includes 306,441 shares issuable pursuant to options exercisable within 60
days.
(14) Includes 46,627 shares subject to a right of repurchase by Ask Jeeves and
409,651 shares issuable pursuant to options exercisable within 60 days.
(15) Includes 537,398 shares subject to a right of repurchase by Ask Jeeves and
936,623 shares issuable pursuant to options exercisable within 60 days.
(16) Includes 38,601 shares owned by Kelly Graves as to which 631465 Alberta
Ltd. disclaims beneficial ownership.
(17) Shares acquired on June 7, 2000.
(18) Includes 1,708 shares issuable pursuant to options exercisable within 60
days and 855 shares subject to a right of repurchase by Ask Jeeves.
(19) Includes 13,475 shares issuable pursuant to options exercisable within 60
days.
(20) Includes 25,158 shares subject to a right of repurchase by Ask Jeeves.
(21) Includes 2,706 shares subject to a right of repurchase by Ask Jeeves.
(22) Includes 32 shares issuable pursuant to options exercisable within 60
days.
(23) Includes 2,243 shares issuable pursuant to options exercisable within 60
days and 25,158 shares subject to a right of repurchase by Ask Jeeves.
(24) Includes 534 shares issuable pursuant to options exercisable within 60
days.
(25) Includes 752 shares issuable pursuant to options exercisable within 60
days.
(26) Includes 9,409 shares held by R.E.K. Profit Sharing Trust and 121 shares
held by San Francisco International Investors as to which Mr. Kings
Disclaims Beneficial Ownership.
(27) Includes 6,410 shares subject to a right of repurchase by Ask Jeeves.
(28) Includes 4,843 shares subject to a right of repurchase by Ask Jeeves.
(29) Includes 4,380 shares issuable pursuant to options exercisable within 60
days.
(30) Includes 963 shares subject to a right of repurchase by Ask Jeeves.
(31) Includes 7,211 shares subject to a right of repurchase by Ask Jeeves.
(32) Includes 8,386 shares subject to a right of repurchase by Ask Jeeves.
(33) Stanford University disclaims beneficial ownership of any shares owned by
investment funds of which Stanford University is a limited partner.
(34) Includes 2,481 shares issuable pursuant to options exercisable within 60
days.
(35) Includes 2,564 shares subject to right of repurchase by Ask Jeeves.
(36) Includes 33,544 shares subject to a right of repurchase by Ask Jeeves.
26
<PAGE>
PLAN OF DISTRIBUTION
The shares of common stock offered by the selling stockholders, or by their
pledgees, transferees or other successors in interest, may be sold from time to
time to purchasers directly by any of the selling stockholders acting as
principal for its own account in one or more transactions at a fixed price,
which may be changed, or at varying prices determined at the time of sale or at
negotiated prices. Alternatively, any of the selling stockholders may from time
to time offer the common stock through underwriters, dealers or agents who may
receive compensation in the form of underwriting discounts, commissions or
concessions from the selling stockholders and/or the purchasers of shares for
whom they may act as agent. Sales may be made on the Nasdaq National Market or
in private transactions. In addition to sales of common stock pursuant to the
registration statement of which this prospectus is a part, the selling
stockholders may sell such common stock in compliance with Rule 144 promulgated
under the Securities Act of 1933, as amended (the "Act").
The selling stockholders and any agents, broker-dealers or underwriters that
participate in the distribution of the common stock offered hereby may be deemed
to be underwriters within the meaning of the Act, and any discounts, commissions
or concessions received by them and any profit on the resale of the common stock
purchased by them might be deemed to be underwriting discounts and commissions
under the Act.
In order to comply with the securities laws of certain states, if
applicable, the common stock may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
common stock may not be sold unless it has been registered or qualified for sale
or an exemption from registration or qualification requirements is available and
is complied with.
In connection with our acquisitions of Net Effect, Direct Hit and Evergreen
and the purchase of assets from Excellerate, we registered the selling
stockholders' common stock under applicable federal and state securities laws.
We have also registered additional shares of common stock to be issued upon the
exercise of warrants issued by Ask Jeeves. We paid substantially all of the
expenses incident to the offering and sale of the common stock to the public,
other than commissions, concessions and discounts of underwriters, dealers or
agents. Such expenses (excluding such commissions and discounts) were $230,000.
The agreements related to the acquisitions of Direct Hit, Net Effect and
Evergreen and the purchase of assets from Excellerate provide for
cross-indemnification of the selling stockholders to the extent permitted by law
for losses, claims, damages, liabilities and expenses arising, under certain
circumstances, out of any registration of the common stock.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered hereby
and certain other matters will be passed upon for us by Cooley Godward LLP, Palo
Alto, California. An investment partnership of attorneys of Cooley Godward and
attorneys who have performed services for Ask Jeeves beneficially own an
aggregate of 4,582 shares of common stock of Ask Jeeves.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule, included in our Annual Report on Form 10-K
for the year ended December 31, 1999, as set forth in their report, which is
incorporated by reference in this prospectus and registration statement and, as
to the years 1997 and 1998, is based in part on the report of
PricewaterhouseCoopers LLP, independent auditors for Net Effect Systems, Inc.
Our financial
27
<PAGE>
statements and schedule are incorporated by reference in reliance on Ernst &
Young LLP's report given on their authority as experts in accounting and
auditing.
The condolidated financial statements of Direct Hit Technologies, Inc. as of
December 31, 1998 and 1999 and for the period from inception (April 27, 1998)
through December 31, 1998 and for the year ended December 31, 1999, incorporated
by reference in this prospectus from our Current Report on Form 8-K/A dated
August 11, 2000, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report which is incorporated by reference in this
prospectus and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
28
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission, or
SEC. You may read and copy these reports, proxy statements and other information
at the SEC's public reference rooms at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C., as well as at the SEC's regional offices at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite
1300, New York, NY 10048. You can request copies of these documents by writing
to the SEC and paying a fee for the copying cost. Please call the SEC at
1-800-SEC-0330 for more information about the operation of the public reference
rooms. Our SEC filings are also available at the SEC's web site at
"http://www.sec.gov." In addition, you can read and copy our SEC filings at the
office of the National Association of Securities Dealers, Inc. at 1735 "K"
Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we will make with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934:
- Annual Report on Form 10-K for the year ended December 31, 1999, filed
March 30, 2000;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, filed
May 15, 2000;
- Current Report on Form 8-K, filed February 14, 2000, amended on Form
8-K/A, filed April 11, 2000 and amended on Form 8-K/A, filed August 11,
2000;
- Current Report on Form 8-K, filed December 2, 1999 and amended on Form
8-K/A, filed January 20, 2000;
- Definitive Proxy Statement, filed April 24, 2000; and
- The description of the common stock contained in our Registration
Statement on Form 8-A12G, as filed on June 28, 1999 with the SEC.
You may request a copy of these filings at no cost, by writing or telephoning us
at the following address:
Ask Jeeves, Inc.
5858 Horton Street, Suite 350
Emeryville, CA 94608
(510) 985-7400
This prospectus is part of a Registration Statement we filed with the SEC. You
should rely only on the information incorporated by reference or provided in
this prospectus and the Registration Statement. We have authorized no one to
provide you with different information. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
29
