Yahoo! to buy Overture

Article Posted 2003 July 25, Friday - Last modified: 2003-10-08
by Sage Lewis - SageRock | Akron, Ohio | United States

So many articles have been written about Yahoo!'s purchase of Overture that we have decided to help you sort through it all by highlighting the facts, implications, and speculations surrounding this important development in online search.

Facts

2003-10-07 - Yahoo! and Overture announce completion of acquisition.
2003-07-14 - Yahoo! buys Overture for $1.63 billion USD in cash and stock.
Yahoo! now owns Overture, Inktomi, AltaVista, and Fast.
MSN is Overture's biggest partner, delivering as much as one third of Overture's revenue this year, or an estimated $350 million.
On Monday, LookSmart's stock price jumped nearly 25% to $4.21 and FindWhat's shares closed up 12 cents to $23.11.
Lisa Gurry, group product manager for MSN, said MSN planned "no immediate changes." Says: "The company's strategy has been to work with Overture and other partners while developing its own technology." Washington Post

Implications

This positions Overture and Yahoo! to better compete against Google.
This puts pressure on MSN to act and consolidate.
Overture advertisers are likely to keep bidding programs since distribution has not changed.
Google advertisers are likely to keep bidding programs since distribution has not changed.
If MSN breaks its relationship with Overture (changing Overture ad distribution), advertisers may want to also buy paid ads through MSN or whatever paid listing program MSN buys or implements.
"Google was at an advantage with its paid search finding its best home on Google.com and not a partner site. Now Overture's revenue splitting problems are mostly solved with the Yahoo deal." SearchEngineWatch

Speculations

Yahoo! owned Inktomi (maybe with Fast and AV mixed in) will probably backfill Yahoo's listings when the Google backfill contract ends.
MSN may or may not continue to use Inktomi's backfill for its listings.
"Overture always says it's such good friends and partners with Microsoft, even helping them with their (search) crawler, but now I wouldn't think it would be all that friendly." SearchEngineWatch
Yahoo may do away with its directory and replace it with paid search.
SEO will become less and less important as the number of free listing players decrease.
SEO will become more and more important as users become more aware of paid listing results and shy away from them - looking instead to free listings as the credible results.
Only large scale SEO efforts will be effective as algorithms consolidate. Spam SEO and SEO opportunism will become more difficult to impossible to implement effectively. Affiliate marketers that rely on these techniques may suffer financially.
SEO and PPC will be equally important since all three major players will probably offer free, PPC, and paid search results.
MSN may buy FindWhat, LookSmart, WiseNut, or Espotting, or may create their own PPC search.

Links to Articles and Resources

Sage Lewis is the president and co-founder of SageRock.com, rated a top search engine marketing firm by the Marketing Sherpa Buyer's Guide to Search Engine Optimization and other industry sites and associations.

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Last modified: 2008-09-25T07:25:49-0700

Yahoo! to buy Overture

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