Merriman Upgrades Ask Jeeves to Buy

Analyst Richard Fetyko sees a continued ramp in search-marketing services from Web advertisers

Merriman Curhan upgraded Ask Jeeves (ASKJ ) to buy from neutral.

Analyst Richard Fetyko says he upgraded and raised his estimates on the search-marketing services provider, based on a continued ramp in search marketing. He believes Yahoo's third-quarter results indicate that advertisers continue to expand their use of search marketing -- driving coverage and price points higher.

Additionally, he notes organic growth in query volume and sequential growth in traffic-acquisition costs suggest seasonality isn't as much of a factor in the quarter as he earlier thought, and that growth was not necessarily limited to Yahoo's Web properties.

Fetyko raised the $1.03 2004 earnings per share estimate to $1.07, and upped the $1.30 2005 estimate to $1.43.