IAC/InterActiveCorp, Internet conglomerate, announced Monday it has an option to purchase Web search engine Ask Jeeves Inc. for $1.85 billion to expand on Internet advertising and search markets.

"It’s an aggressive move by IAC. We think they’ll face many challenges. They’ll have to invest significantly to improve the search engine," said Susquehanna analyst Marianne Wolk.

The deal will help IAC to compete on the market and derail its main rivals, Google Inc., Yahoo Inc. and Microsoft Corp.

Under the terms, IAC will pay a premium of about 17% for Ask Jeeves. It will also issue 1.2668 shares of its stock for each Ask Jeeves share buying back about 60% of the shares it issues.