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August 15, 2003
Yahoo to Acquire Overture for $1.63 Billion
In a move designed to combat the competitive threat from Google, Yahoo! announced a deal in July to acquire Overture for approximately $1.63 billion. The acquisition was not unexpected for MarketPosition readers since I had discussed the high likelihood of such a purchase back in May.
Overture is the leading pay-per-click player. Yahoo! has long used Overture for the sponsored section of their search results, receiving a percentage of Overture's advertising revenues. Yahoo! is expected to win by receiving 100% of the Overture revenues produced on Yahoo.com while continuing to serve Overture results to the other major participating search engines.
The crawler-based search results on Yahoo! are currently provided by Google. However, with Yahoo!'s acquisition of Inktomi earlier this year, Google's days are numbered at Yahoo. In addition, Overture recently acquired the FAST and AltaVista crawlers. With the Yahoo! acquisition of Overture expected to be complete by the end of the year, this will give Yahoo! control of Overture, Inktomi, FAST, and AltaVista.
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