Much of the search growth came from toolbar searches, which was up by 35% in terms of revenue. Search also was up 5% in terms of income, but IAC decided to write off a $1 billion “impairment charge” on Ask.com. The exact amount was $1,020.6 million loss on the search business, which includes Ask.com.

Here are some more details from Reuters on the impairment charge and some notes from the IAC release:

Search consists of our search properties such as Ask.com, Fun Web Products, and Dictionary.com, our distribution business, which includes distributed search, sponsored listings and toolbars, and Citysearch.

Search revenue reflects an increase in proprietary queries and the continued growth in distributed toolbar partners and queries, partially offset by a decline in revenue per query. Ask.com’s site enhancements have improved monetization, leading to increased revenue per query, but have resulted in fewer queries per visit as users find their desired results more quickly. Citysearch’s revenue declined, primarily reflecting lower display revenue due to lower pricing and a planned reduction in inventory availability.

Operating Income Before Amortization was favorably impacted by higher revenue and lower marketing costs, partially offset by higher traffic acquisition costs as a percentage of revenue versus the year ago period. Operating loss in the current year was negatively impacted by impairment charges totaling $1.045 billion related to the goodwill and intangible assets of IAC Search & Media. These charges were identified in our annual impairment assessment and are due to lower growth projections for revenue and profits for IAC Search & Media in future years that reflect the Company’s consideration of industry growth rates, competitive dynamics and IAC Search & Media’s current operating strategies and the impact of these factors on the fair value of IAC Search & Media and its goodwill and intangible assets.

Jared Cluff, Ask’s senior VP of marketing, says the deal produced some measurable results in 2009:

“We saw double-digit increases in usage among NASCAR fans. With the fan cards that our Ask Ambassadors passed out at the track, we saw a 27 percent conversion rate to the site, so fans were coming back from the track and going to the site. That’s a remarkable stat.”

The Sporting News says Ask spent about $15 million on its NASCAR-related sponsorships last year. The deal was announced last January, with Ask saying the agreement would help it compete against Google, Yahoo, and Microsoft. But a year later, Ask remains a distant fourth in market share according to both Hitwise and comScore, and fifth according to Nielsen.

Armstrong said this at Citi’s annual entertainment, media and telecommunications conference today. This was prompted by a question about possibly using Microsoft Bing as a search partner at the end of this year, when the Google deal expires. Armstrong added that a new search deal, under the new independent AOL, will be financially good for them. He specifically said they “may trade search dollars for more display dollars.”

Armstrong is a former Google executive, who was named the CEO of AOL back six months ago.

Diller, the CEO of IAC — Ask.com’s parent company — was clarifying comments made in October, when he said he’s “open to consolidating transactions in the area of search,” and that it’s “unlikely that we would be the consolidator.” Today, he talked about turning away others who wanted to buy Ask.com:

“The people who called us were on exploration missions, on a stand-alone buy as an asset. That is different than having conversations with other people in the vineyard, in the area of search…. I think further consolidation in search is necessary given Google’s dominance.”

But with search possibly soon to be a two-horse race between Google and Bing/Yahoo, Diller doesn’t seem to have many consolidations options left. He said he’s had “idle chat” with AOL about partnering on search and local services, but has no interest in acquiring AOL.

In the meantime, Ask is doing and trying a lot of things to keep users and redefine its role in this new, contracting or consolidating search landscape. Most recently it made a major push into shopping with “deals search.” Another major initiative to soon gain more momentum and visibility is something of a return to Ask’s roots as a “Q&A” engine. (The picture immediately below is circa 2001.)

Ask, which has been highlighting “answers” for some time, is going to move more directly into social search or real-time Q&A.

Ask President Doug Leeds told me the other day that Ask still gets a huge number of queries formulated as questions. In recognition of that and the more recent rise of social and “real time” search, Ask will begin to enlist its community directly in answering questions and use a number of sophisticated algorithms around question routing and identifying trustworthy and authoritative answers and people.

If well executed it could be an effective strategy for the company (including in mobile), which despite many years of innovative efforts under former CEO Jim Lanzone was not really able to grow its share beyond 4 percent of overall traffic.

Q&A services have been around for quite some time, while “social search” and “real time search” are newer phenomena. We could identify a range of companies that are in one way or another enlisting humans to answer queries or questions. Beyond Yahoo Answers, Mahalo and others like them, there are Aardvark, kgb, ChaCha, not to mention Facebook and Twitter, that fall into these categories to varying degrees. And Google recently introduced “social search” seeking to bring humans more directly into search results.

Leeds said to me that almost nobody in the segment today is going to be able to do what Ask can do with social search/Q&A “at scale.” I think that the strategy makes a great deal sense for Ask. Whether it people ultimately use it will depend entirely on execution.

“We’ve been asked a lot whether we’re open to consolidating transactions in the area of search. The answer is yes,” Diller said. “And, it is unlikely that we would be the consolidator.” Diller also called the future of Ask.com “speculative” during today’s call, citing the “fierce” competition in search.

IAC’s media and advertising business — which includes Ask.com — suffered an 11 percent drop in revenues in Q3. And according to the latest comScore survey, Ask.com is a distant fourth in the search race with just 3.9% market share. It’s actually moved away from being a true search engine recently, and returned to its roots with the expansion of AnswerFarm, a Q&A database that was launched one year ago.

Who would want a struggling search engine? Silicon Alley Insider thinks Microsoft could be the only suitor.

There’s more Ask.com discussion on Techmeme.

Gulli said he will be “leading all the engineering development for UX and verticals in Europe,” focusing on Microsoft Bing’s search technology and user interface. He will be working at Microsoft’s London site of STC Europe nearby Carnaby Street.

What I found most interesting about his announcement post was that he, in not so many words, explained that he now has the resources needed to make a difference in search. The way I read it was that he felt that at Ask.com, he didn’t have enough resources to accomplish his goals. Gulli said that at Microsoft “you get the resources to experiment with it.”"Search is all about continuous improvements and evolutions, isn’t it?” Gulli added.

Congrats on the new job Antonio, it seems like you will be happy at Microsoft.

You read that? “My company just gave up on search. Where do I work now” and then the URL at the bottom. That is Ask.com being funny and then trying to pick up Yahoo Search employees. I am also being told that they are giving away bars of chocolate that say the same line.

Yea, Yahoo did give up on search but I also personally believe Ask.com has also given up on search.

IAC said revenue per query declined because of an “improved experience on Ask.com following its relaunch in October.” The relaunch has lead to “fewer clicks by consumers to find what they are looking for, as well as a decrease in cost per click.”

Here are the key numbers from the earnings release:

• Overall Revenues at $340 million down 4% from a year ago, at $354.2M
• Media & Advertising Revenues at $168.6M down 10% from a year ago, at $186.3M

Full details can be found in the IAC release.

In its most recent earnings report, IAC’s “media & advertising” business (which reflects search revenues) was off 22 percent compared with the same period a year ago. Ask’s market share, as the WSJ article points out, has remained largely flat during Safka’s time at the helm, with just under a 4 percent share of the search market in the US. However, in an email to Danny, Safka described a number of achievements, including growing traction for Ask’s vertical strategy and success with the return of Jeeves the butler in the UK.

In early January, 2008 Safka replaced then Ask CEO Jim Lanzone, who had presided over the innovative “Ask 3D” relaunch. Lanzone became CEO of Ask in April, 2006 himself replacing Steve Berkowitz who went to Microsoft. (Berkowitz is currently CEO at Move.com.)