Question and answer search engine Ask Jeeves Wednesday disappointed Wall Street estimates as the company recoded a third-quarter loss and slumping sales.

The company said it lost $27.5 million, or 74 cents per share, compared with a loss of $38.5 million, or $1.08 per share during the same time last year.

A quorum of analysts from Thomson Financial/First Call predicted that loss would average 27 cents.

The company also said its incoming cash flow dropped nearly 50 percent, to $15.4 million from $29 million.

On top of the Q3 results, Ask Jeeves and Univision Communications, Inc. Wednesday mutually agreed to dissolve Ask Jeeves en Espanol ("AJEE"), a Spanish language joint venture between the companies.

Because of that, Jeeves will get back about $7 million, a $5 million credit for advertising inventory on the Univision Network, and reacquire the rights and licenses originally assigned to the venture.

Ask Jeeves based the overall bad news on economic conditions and the September 11 attacks. Still, Ask Jeeves CEO Skip Battle sees a silver lining to it all.

"This was our most productive quarter since my arrival," says Battle. "We completed all our interim growth initiatives while continuing to lower our break-even point. We introduced our new enterprise software solution, Jeeves One, and gained advanced search technology through our acquisition of Teoma Technologies, Inc. I now believe that, barring further economic weakness or another catastrophic event, 2002 will be a period of sustained growth."

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And if you thought that the third quarter was bad, the last three months should be shaky as well for the search engine.

"We are losing $800,000 in revenue per quarter, says Ask Jeeves CFO Steve Sordello. "Despite these circumstances, November and December are showing signs of growth."

For the fourth quarter of 2001, Ask Jeeves is targeting revenues of approximately $15 million.

The Emeryville, Calif.-based company's revenue comes from advertising, sponsorship and e-commerce sales on Ask.com, DirectHit.com and AJKids.com, as well as Ask Jeeves' syndication services. Jeeves Solutions (its business division) revenue is generated from companies licensing Ask Jeeves' technology for site-specific customer support and e-commerce applications, as well as Ask Jeeves International revenues.