photo © 2008 Desi | more info(via: Wylio) IAC’s Ask.com has laid off 130 of its search engineers in New Jersey and China and surrendered its search operations to its competitors in the notoriously tough search market. Remaining search staff, who primarily worked on maintaining the rank algorithm, will be relocating to Oakland, and focusing on the Ask Q&A product.

Search is an almost impossible business to get into, with Google controlling around 66% of the market and Microsoft controlling another 27.9% with its Yahoo partnership, according to Comscore. Ask was number three at 3.8% share.

Much like Yahoo did with Bing, Ask will be outsourcing it’s search technologyto a company that it has declined to mention. As Ask already has a partnership with Google, Google might be a pretty safe bet.

What does this mean for the search industry? While this is yet another proof that it is hard to compete with Google, there are tons of smaller scrappier search engines, including Aol, Altavista and Lycos. As newcomer Blekko has positioned itself as gunning for the number three slot in search, this recent development must be great news.

The Q&A space is hot right now, but like search it has its fair share of competitors. By attempting to win with Q&A, Ask will be up against dominant players Quora, Formspring and Facebook. IAC boss Barry Diller, who infamously quipped “Ask has no value inside of IAC”at TechCrunch Disrupt in September, will most likely face an uphill battle there as well.

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Authors: Alexia Tsotsis

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