The world of search engines is heating up and there are a lot of big names jockeying for position.

Less than a week ago Microsoft’s MSN entered the paid search game and then earlier this week everyone’s favorite Internet butler, Ask Jeeves, agreed to by bought by media mogul Barry Diller’s IAC/InterActiveCorp.

The $1.85 billion stock deal, which should be finalized by the end of the year, is just the financial boost that could help Ask Jeeves to compete with the largest search players.

Currently, Ask Jeeves is considered a second-tier search engine, behind market leaders Google, Yahoo! Search, MSN Search, and AOL Search. Ask Jeeves had 5.3 percent of Web searches in the U.S. in December, according to comScore Media Metrix, while Google has more than 40 percent of the market.

But that could change. Ask Jeeves, which also owns Excite, iWon, and My Way, may get a shot in the arm by joining the IAC roster, which includes Citysearch.com, Expedia.com, Ticketmaster.com, Match.com, and retail channel Home Shopping Network. Those properties drew 44 million unique visitors in January, according to comScore.

It looks like search experts are divided on Ask Jeeves’ chances to make some inroads on the big boys. Many say the other search engines are just to popular. Still others, say that consumers aren’t really loyal to particular search engines. comScore reports that 65 percent of users use at least two search engines per month.

But for now, Ask Jeeves relies on Google for sponsored search results. Approximately 70 percent of Ask Jeeves’ revenue is drawn from ads negotiated by Google.

According to Minneapolis-based financial researcher Piper Jaffray, the market for ads linked to search results is projected to triple to $12.6 billion by 2010. Merrill Lynch Equity Research says that online advertising and search markets are growing rapidly. Search now accounts for 36 percent of U.S. online advertising and that figure is expected to grow 24 percent per year over the next five years.

Let me know your thoughts on the search space.