e8vk

On July 28, 2004, Ask Jeeves, Inc. (“we” or “Ask Jeeves”) issued a press release reporting second quarter 2004 consolidated financial results. A copy of the press release is attached to this report as Exhibit 99.1 and is incorporated by reference herein in its entirety.

As previously announced, our management intends to hold a conference call to discuss our quarterly results and our business outlook. The conference call is scheduled to begin at 5 p.m. Eastern time on Wednesday, July 28, 2004. A live webcast of the conference call will be available on the Investor Relations section of the Ask Jeeves’ web site (http://www.Ask.com/investor) under the category “Earnings Releases.” The webcast will also be archived for approximately three months on the same portion of the Company’s web site starting one hour after the call’s completion.

In addition to financial measures prepared in accordance with generally accepted accounting principles, or GAAP, Ask Jeeves’ earnings release contains pro forma income (loss) measures. The tables attached to the earnings release also (a) present pro forma EBITDA and (b) include a pro forma condensed consolidated statement of operations which shows each pro forma component of pro forma income (loss). These pro forma metrics were not prepared in accordance with GAAP and might be calculated differently than similarly-titled pro forma measures presented by other companies. In calculating pro forma income (loss), Ask Jeeves adjusted its GAAP-basis income (loss) from continuing operations to exclude the effects of amortization of other assets and other items which management believes do not reflect Ask Jeeves core business performance, as listed on the reconciliation table attached to this report. In calculating pro forma EBITDA, Ask Jeeves further adjusts pro forma income (loss) from continuing operations to exclude income tax provision, net interest and other income and depreciation. Attached to the earnings release are reconciliation tables explaining how these pro forma measures are derived from the most directly comparable GAAP measures. The attached pro forma condensed consolidated statement of operations presents a complementary explanation of how Ask Jeeves calculated pro forma income (loss) from continuing operations.

Ask Jeeves’ management believes that the presentations of pro forma income (loss) and pro forma EBITDA (as well as the pro forma statement of operations) are useful to investors and other interested persons because those metrics excluded items which management believes are less directly attributable (than the included items) to the underlying performance of what Ask Jeeves considers to be its core business operations and, thus, the pro forma presentations provide additional insights into the Ask Jeeves’ core operating results. In addition, Ask Jeeves has consistently provided these pro forma income (loss) metrics in previous earnings releases and believes that investors and other interested persons will find the current pro forma data useful for comparing the Company’s current report with its prior reports. Management refers to these pro forma measures to facilitate internal comparisons between the reporting periods, in making operating decisions and for budget planning purposes.

There are limitations associated with Ask Jeeves’ pro forma metrics. For example, the pro forma metrics do not reflect (a) amortization of stock based compensation, (b) amortization of other intangible assets, (c) transaction costs related to certain merger and acquisition activities that did not come to fruition, (d) the write-off of obsolete equipment, (e) gains on joint venture acquisitions or dissolutions or (f) restructuring costs from corporate downsizing. Forward-looking pro forma guidance does not, of course, reflect any effect that currently unanticipated events might have on Ask Jeeves’ financial performance for the projected periods. As a result of these limitations, Ask Jeeves’ pro forma measures should be considered in addition to, not as a substitute for, nor superior to, measures of financial

performance that are prepared in accordance with GAAP. As mentioned above, Ask Jeeves earnings release includes tables reconciling the non-GAAP measures presented therein with the most directly comparable GAAP measures, as required by SEC rules regarding the use of non-GAAP financial measures.

This Report on Form 8-K and the accompanying exhibit are being furnished under Item 12. Pursuant to General Instruction B.6 of Form 8-K, neither the exhibit nor any of the other information in this Report shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, except to the extent Ask Jeeves may specifically incorporate this report (or specified portions hereof) into a filing under the Securities Act of 1933, as amended, or the Exchange Act.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

EMERYVILLE, Calif., July 28, 2004 — Ask Jeeves, Inc. (Nasdaq: ASKJ; “the Company”) today reported results for the second quarter ended June 30, 2004. The Company’s financial results include the acquisition of Interactive Search Holdings (“ISH”) from the closing date of May 6, 2004.

Revenues for the quarter ended June 30, 2004 were $60.3 million. These second quarter results represent 136 percent growth over revenues of $25.6 million for the comparable year-ago quarter.

“We executed well this past quarter. We improved the user experiences across our sites, doubled our market share with the closing of Interactive Search Holdings and continued to see strong demand for search and media advertising,” said Steve Berkowitz, CEO of Ask Jeeves. “We believe we are in a great position in a great space to continue our growth. In the back half of the year we will continue to innovate and improve, making our experiences even more compelling for users.”

Pro forma income from continuing operations for the second quarter was $15.7 million, or $0.24 per share. For the comparable year-ago quarter, Ask Jeeves’ pro forma income from continuing operations was $5.2 million, or $0.10 per share. These pro forma results should be evaluated in light of the Company’s financial results prepared in accordance with GAAP. Under GAAP, Ask Jeeves’ income from continuing operations for the second quarter of 2004 was $11.6 million, or $0.18 per share. This compares to income from continuing operations on a GAAP basis of $4.9 million, or $0.09 per share, for the comparable year-ago quarter. Cash, cash equivalents and marketable securities totaled $86 million on June 30, 2004

Ask Jeeves’ pro forma results are calculated by adjusting GAAP income from continuing operations to exclude the effects of amortization of other assets and certain other items as detailed in the accompanying table. A table reconciling the Company’s pro forma income from continuing operations to GAAP income from continuing operations is included in the condensed consolidated financial statements in this release. Unless otherwise indicated, revenues, pro forma and other metrics in this release are based on Ask Jeeves’ continuing operations. Ask Jeeves completed the sale of its Jeeves Solutions division on July 1, 2003.

The following business outlook contains forward-looking statements describing management’s current expectations for the future. The matters discussed in these forward-looking statements are subject to numerous assumptions, risks and uncertainties, some of which are listed or referred to in the cautionary note below. The pro forma guidance below has been calculated in a manner consistent with the pro forma historical data provided above and in the tables attached to this earnings release. Commenting on Ask Jeeves’ business outlook, the Company’s CFO, Steve Sordello said “Our positive momentum continues. It’s reflected in our operational and financial results and our steady commitment to a long-term investment path that allows us to take advantage of the search market opportunity, which we believe is one of the best growth opportunities on the web.”

For the third quarter, Ask Jeeves anticipates revenues of $74 million and pro forma income of approximately $16.5 million, or $0.24 per share. Ask Jeeves anticipates that GAAP net income will be $0.14 per share. The anticipated difference between third quarter GAAP-basis net income and pro forma income is expected to result primarily from amortization of intangible assets associated with the ISH acquisition. The earnings per share forecast assumes a share count of 70 million shares.

Ask Jeeves anticipates revenues of approximately $260 million and pro forma income of approximately $1.03 per share for 2004. GAAP net income is expected to be $0.77 per share. The anticipated difference between GAAP-basis net income and pro forma income is primarily related to the non-cash amortization of intangibles.

Ask Jeeves will hold a conference call to discuss its second quarter 2004 results and its business outlook for the third quarter and the year 2004 at 5 p.m. Eastern time on July 28, 2004. A more-detailed outlook will be presented on the call than is contained in this release. Interested persons can listen to a live broadcast of the conference call on the Internet at www.ask.com/investor. To listen to the live call, go to the web site at least fifteen minutes prior to the start time to download and install the necessary audio software. For those unable to listen to the live broadcast, a replay will be available one hour after the conclusion of the call at www.ask.com/investor for a period of three months. The financial and statistical information to be discussed during the conference call will be posted on Ask Jeeves Web site at www.ask.com/investor under the category “Earnings Releases.”

This press release contains forward-looking statements. All statements regarding the future are forward-looking statements, including those statements regarding the Company’s potential for future growth, the Company’s anticipated increase in investment in its business, the Company’s plans to continue to innovate and improve and all expectations regarding financial forecasts including revenue and productivity metrics, cash flow, net income, pro forma income, revenue growth and pro forma earnings per share of the Company in the future. The matters discussed in those statements are subject to risks and uncertainties that could cause actual results to differ materially from the results expressed or implied by the forward-looking statements. The forward-looking guidance provided in this press release is subject to numerous assumptions, risks and other uncertainties and is based on limited information available to Ask Jeeves at this time, which is subject to change. As a result of these uncertainties and information limits, Ask Jeeves’ actual results in the future may differ materially from management’s current expectations. Although management’s expectations may change after the date of this release, Ask Jeeves undertakes no obligation to revise or update the guidance above. The lack of any revision or update is not meant to imply continued affirmation of the guidance.

Factors that might cause or contribute to such differences include, but are not limited to: Ask Jeeves’ dependence on the Internet and its dependence on a third-party paid placement provider; the risk that acquisitions are not integrated successfully, the risk of further vertical consolidation in the Internet search and keyword advertising markets; the risk that Ask Jeeves’ user base might migrate to other search engines or that its web traffic might otherwise decline; risks associated with rapid technological change; the risk that companies’ internet advertising budgets might contract or grow at a slower pace; Ask Jeeves’ dependence on third parties for content, distribution and advertising delivery; potential lack of market acceptance of Ask Jeeves advertising products; introduction of new advertising products or search technologies by competitors; declines in the average selling price of Ask Jeeves’ advertising products; and adverse economic conditions in any of the major countries or markets in which Ask Jeeves does business or to which its web content is targeted. As a relatively short announcement, this press release cannot present a full discussion of such risks. Further information on risk factors that could affect Ask Jeeves’ financial results is included in its most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. Ask Jeeves encourages investors to read all of the disclosures in its SEC filings for a broader discussion of important factors that may be material to investors and may affect Ask Jeeves’ business, financial condition and results of operations.

Ask Jeeves, Inc. provides consumers and advertisers with information retrieval products across a diverse portfolio of Web sites, portals and desktop search applications. Ask Jeeves’ search and search-based portal brands include: Ask Jeeves (Ask.com and Ask.co.uk); Ask Jeeves for Kids (AJKids.com); Excite (excite.com); iWon (iwon.com); My Search (mysearch.com); My Way (myway.com); My Web Search (mywebsearch.com) and Teoma (teoma.com). Ask Jeeves also owns the search technology Teoma, proprietary natural language processing technology, as well as portal and ad serving technologies. In addition to powering several of the Ask Jeeves brands,

the Company syndicates its technologies to help companies increase revenue through powerful search. Ask Jeeves’ advertising services, which includes Ask Jeeves, The Excite Network, and MaxOnline, provides advertisers with targeted tools to reach a broad base of highly valuable customers. Ask Jeeves, Inc. is headquartered in Emeryville, California, with offices throughout the United States, as well as in London, Dublin, and Tokyo. For more information, visit http://www.Ask.com or call 510-985-7400.

NOTE: Ask Jeeves, Ask.com, Teoma, My Way, My Search, My Web Search, iWon, Excite and MaxOnline are trademarks or registered trademarks of Ask Jeeves, Inc.


								Three Months Ended								Six Months Ended
								(unaudited)								(unaudited)

				June 30, 2004					June 30, 2003					June 30, 2004					June 30, 2003

Revenues				$	60,341		100.0	%	$	25,568		100.0	%	$	99,570		100.0	%	$	48,282		100.0	%
Cost of revenues					15,944		26.4	%		4,964		19.4	%		21,738		21.8	%		9,958		20.6	%

Gross profit					44,397		73.6	%		20,604		80.6	%		77,832		78.2	%		38,324		79.4	%
Operating expenses:
			Product development		5,205		8.6	%		3,252		12.7	%		9,958		10.0	%		6,796		14.1	%
			Sales and marketing		16,645		27.6	%		7,137		27.9	%		25,809		25.9	%		14,028		29.1	%
			General and administrative		6,300		10.4	%		4,923		19.3	%		11,638		11.7	%		8,549		17.7	%

Total pro forma operating expenses					28,150		46.6	%		15,312		59.9	%		47,405		47.6	%		29,373		60.9	%

Pro forma operating income					16,247		27.0	%		5,292		20.7	%		30,427		30.6	%		8,951		18.5	%
Interest and other income, net					192		0.3	%		193		0.8	%		631		0.6	%		381		0.8	%

Pro forma income before income tax provision					16,439		27.3	%		5,485		21.5	%		31,058		31.2	%		9,332		19.3	%
Income tax provision					700		1.2	%		335		1.3	%		1,800		1.8	%		670		1.4	%

Pro forma income from continuing operations				$	15,739		26.1	%	$	5,150		20.2	%	$	29,258		29.4	%	$	8,662		17.9	%

	Basic pro forma income from continuing operations per share			$	0.30				$	0.12				$	0.59				$	0.20

Weighted average shares outstanding used in computing basic pro forma income from continuing operations per share					53,333,993					43,260,912					49,456,303					42,648,742

Diluted pro forma income from continuing operations per share				$	0.24				$	0.10				$	0.47				$	0.17

Weighted average shares outstanding used in computing diluted pro forma income from continuing operations per share					65,542,792					53,541,479					61,803,135					51,004,790

Revenues from related parties				$	1,131				$	1,131				$	2,262				$	2,262


RECONCILIATION OF PRO FORMA INCOME FROM CONTINUING OPERATIONS TO GAAP INCOME FROM CONTINUING OPERATIONS

Pro forma income from continuing operations				$	15,739				$	5,150				$	29,258				$	8,662
Cost of revenues					(39	)				—					(39	)				—
		Amortization of other assets			(2,094	)				(522	)				(2,369	)				(1,044	)

					(2,133	)				(522	)				(2,408	)				(1,044	)
Product Development					(23	)				(2	)				(23	)				(2	)
Sales and marketing					(66	)				(1	)				(66	)				(1	)
General and administrative					(19	)				(1	)				(19	)				(2	)
		Amortization of other assets			(7	)				(7	)				(14	)				(14	)
		Transaction costs			—					21					—					(625	)

					(26	)				13					(33	)				(641	)
Amortization of other intangibles					(2,005	)				—					(2,005	)				—
Gain on acquisition and dissolution of joint ventures					—					232					—					6,355
	Interest and other income, net				75					(13	)				217					(21	)

Income from continuing operations				$	11,561				$	4,857				$	24,940				$	13,308

Amortization of other assets consists of the pro-rata expensing of intangibles from acquisitions, certain licensing fees, and trademarks.

Transaction costs in 2003 related to certain merger and acquisition activities that did not come to fruition.

Amortization of other intangibles consists of the amortization of intangibles from the acquisition of ISH in 2004.

Gain on acquisition and dissolution of joint ventures in 2003 consists of a gain from the acquisition of our UK joint venture and a gain from the dissolution of our Ask Jeeves en Espanol joint venture.

The adjustments to interest and other income, net consist of realized gains and losses on investments, losses on disposals of assets, foreign exchange gains and losses, and miscellaneous income.


						Three Months Ended													Six Months Ended
						(unaudited)												(unaudited)

			June 30, 2004						June 30, 2003						June 30, 2004						June 30, 2003

			Amount			Per Share			Amount			Per Share			Amount			Per Share			Amount			Per Share

Pro forma income from continuing operations			$	15,739		$	0.24		$	5,150		$	0.10		$	29,258		$	0.47		$	8,662		$	0.17
Depreciation				2,443			0.04			1,780			0.03			4,174			0.07			3,703			0.07
Interest and other income, net				(192	)		—			(193	)		—			(631	)		(0.01	)		(381	)		(0.01	)
Income tax provision				700			0.01			335			0.01			1,800			0.03			670			0.01

Pro forma EBITDA from continuing operations				18,690			0.29			7,072			0.14			34,601			0.56			12,654			0.24
Adjustments:
	Depreciation			(2,443	)		(0.04	)		(1,780	)		(0.03	)		(4,174	)		(0.07	)		(3,703	)		(0.07	)
	Interest and other income, net			192			—			193			—			631			0.01			381			0.01
	Income tax provision			(700	)		(0.01	)		(335	)		(0.01	)		(1,800	)		(0.03	)		(670	)		(0.01	)
	Cost of revenues			(39	)		—			—			—			(39	)		—			—			—
		Amortization of other assets		(2,094	)		(0.03	)		(522	)		(0.01	)		(2,369	)		(0.04	)		(1,044	)		(0.02	)

				(2,133	)		(0.03	)		(522	)		(0.01	)		(2,408	)		(0.04	)		(1,044	)		(0.02	)
	Product development			(23	)		—			(2	)		—			(23	)		—			(2	)		—
	Sales and marketing			(66	)		—			(1	)		—			(66	)		—			(1	)		—
	General and administrative			(19	)		—			(1	)		—			(19	)		—			(2	)		—
		Amortization of other assets		(7	)		—			(7	)		—			(14	)		—			(14	)		—
		Transaction costs		—			—			21			—			—			—			(625	)		(0.01	)

				(26	)		—			13			—			(33	)		—			(641	)		(0.01	)
	Amortization of other intangibles			(2,005	)		(0.03	)		—			—			(2,005	)		(0.03	)		—			—
	Gain on acquisition and dissolution of joint ventures			—			—			232			—			—			—			6,355			0.12
	Interest and other income, net			75			—			(13	)		—			217			—			(21	)		—

Income from continuing operations			$	11,561					$	4,857					$	24,940					$	13,308

	Weighted average shares outstanding used in computing diluted income from continuing operations per share			65,542,792		$	0.18			53,541,479		$	0.09			61,803,135		$	0.40			51,004,790		$	0.26

Note: Pro forma EBITDA from continuing operations is defined as pro forma income from continuing operations excluding depreciation, interest and other income, and income tax provision.

ASK JEEVES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)


		Three Months Ended					Six Months Ended
		June 30,					June 30,
		(unaudited)					(unaudited)

		2004		2003			2004		2003

Revenues		$	60,341	$	25,568		$	99,570	$	48,282
Cost of revenues			18,077		5,486			24,146		11,002

Gross profit			42,264		20,082			75,424		37,280
Operating expenses:
	Product development		5,228		3,254			9,981		6,798
	Sales and marketing		16,711		7,138			25,875		14,029
	General and administrative		6,326		4,910			11,671		9,190
	Amortization of intangibles		2,005		—			2,005		—

Total operating expenses			30,270		15,302			49,532		30,017
Operating income			11,994		4,780			25,892		7,263
Gain on acquisition and dissolution of joint ventures			—		232			—		6,355
Interest and other income/expense, net			267		180			848		360

Income before income tax provision			12,261		5,192			26,740		13,978
Income tax provision			700		335			1,800		670

Income from continuing operations			11,561		4,857			24,940		13,308
Loss from discontinued operations			—		(458	)		—		(1,218	)

Net income		$	11,561	$	4,399		$	24,940	$	12,090

Earnings per Share- Basic:
Income from continuing operations		$	0.22	$	0.11		$	0.50	$	0.31
Loss from discontinued operations		$	—	$	(0.01	)	$	—	$	(0.03	)

Net income per share		$	0.22	$	0.10		$	0.50	$	0.28

Weighted average shares outstanding used in computing basic net income (loss) per share			53,333,993		43,260,912			49,456,303		42,648,742

Earnings per Share- Diluted:
Income from continuing operations		$	0.18	$	0.09		$	0.40	$	0.26
Loss from discontinued operations		$	—	$	(0.01	)	$	—	$	(0.02	)

Net income per share		$	0.18	$	0.08		$	0.40	$	0.24

Weighted average shares outstanding used in computing diluted net income (loss) per share			65,542,792		53,541,479			61,803,135		51,004,790

Revenues from related parties		$	1,131	$	1,131		$	2,262	$	2,262


				June 30,		December 31,
				2004		2003

				(unaudited)
ASSETS
Current assets:
	Cash and cash equivalents			$	70,782	$	36,673
	Marketable securities				15,015		143,975

		Total cash, cash equivalents and marketable securities			85,797		180,648
	Accounts receivable, net				30,170		12,062
	Prepaid expenses and other current assets				5,501		3,299

			Total current assets		121,468		196,009
Property and equipment, net					17,212		10,933
Goodwill					272,045		—
Intangible assets, net					101,170		831
Other long-term assets					5,886		4,482

			Total assets	$	517,781	$	212,255

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable and other accrued liabilities			$	46,047	$	12,050
	Accrued compensation and related expenses				8,176		5,137
	Accrued restructuring costs				792		1,167
	Deferred revenue				3,238		5,367
	Note payable				2,144		—
	Current portion of capital lease obligation				767		—

			Total current liabilities		61,164		23,721
Convertible subordinated notes					115,000		115,000
Capital lease obligations, less current portion					570		—
Other liabilities					326		326

			Total liabilities		177,060		139,047
Commitments and contingencies
Stockholders’ equity					340,721		73,208

			Total liabilities and stockholders’ equity	$	517,781	$	212,255


Delaware		000-26521		94-3334199

(State or Other Jurisdiction	(Commission		(I.R.S. Employer
of Incorporation)	File Number)		Identification Number)


		ASK JEEVES, INC. (Registrant)

Date:July 28, 2004	By:	/s/ Brett M. Robertson
		Brett M. Robertson General Counsel and Secretary


Exhibit No.		Description

99.1		Press Release of Ask Jeeves, Inc. dated July 28, 2004.