(FORTUNE Magazine) – Ask Jeeves, the Internet search portal with the portly butler for a mascot, appears to have all the answers of late. A former dot-com flameout--shares rose as high as $186 apiece in 1999, only to plummet below $1--the stock caught fire again last year, spiking its price/earnings ratio up into questionable territory. We were surprised, then, in mid-April when respected analyst Safa Rashtchy of Piper Jaffray upgraded Ask Jeeves (ASKJ, $41) to "outperform" ahead of its first-quarter earnings results, with shares trading at $36. But two days later the company announced profit growth of 74%, and the stock jumped again. We clearly don't get it. So we called Rashtchy with some searching questions. --David Rynecki

The stock is up 1,600% over the past two years and has a P/E of 85. Was this really the right time to upgrade?

I actually had a buy on Ask Jeeves starting in January 2003 at $5 a share and then downgraded at $15 in March of 2003 because I was concerned that Ask Jeeves might not be able to compete effectively with Google and Yahoo. The company has shown that it can grow market share and, for the first time, increase the frequency of use by existing users too. What is also compelling is the competition between Google and Yahoo. Yahoo wants to stop Google from gaining ground before Google's IPO, and that could be good for Ask Jeeves because it currently gets paid by Google for sending traffic. If Yahoo decided it wanted to work with Ask Jeeves, that could mean higher revenues for Ask Jeeves.

So searching is actually big business?

Search has been the Holy Grail of Internet marketing. It is already a $3 billion industry and it is not made up of phony revenues. It makes money from advertisers who actually put food on their table and send their kids to college. You hear eBay-type stories about businesses being built solely by advertising on search portals.

How does Ask Jeeves make money?

It makes money by putting advertisers in front of people who are searching for products. If you are looking for a golf club and don't know where to go, you can go to Ask Jeeves and connect to an advertiser and Ask Jeeves makes money from that. A lot of times that advertiser is listed by Google, and so Google pays Ask Jeeves a fee for every referral.

What will be the impact on other search companies when Google goes public?

Google is a very big deal. It will help the whole search space. Search is in the early stages of growth. We have only 200,000 businesses online. We can have millions. Those won't all go to one or two companies. Ask Jeeves, for example, will benefit as more and more companies that never thought they could go nationwide, even doctors looking for patients, find they can.

Of the companies trading now, should investors own Ask Jeeves or Yahoo?

It depends on the time frame. Ask Jeeves is probably in the second tier of companies to own for the long term, and Yahoo is in the top tier. For the shorter time frame of a year or two, I would put Ask Jeeves in the first tier.