I worked in the Watson group during the time you mention - the problem that they made was to attempt to productize the original Jeopardy system. The Jeopardy system was built with the single-minded goal of winning jeopardy. It was much too heavy weight for real-world applications - it required unbelievable computing resources and simply could not be deployed in the cloud as it could only run on Power machines.

Ultimately much of the system had to be rewritten and this took years by which time, it was just another competitor in a crowded market