Yahoo buying pay-for-search pioneer Overture in $1.6 billion deal
Monday, July 14th 2003, 12:00 am
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SAN FRANCISCO (AP) _ Internet portal Yahoo! Inc. is buying Overture Services Inc., which pioneered a pay-for-placement search engine, in a $1.6 billion deal announced Monday.
The deal would further Yahoo's strategy of moving from being a mainly advertising-supported site to a more diversified company with several kinds of subscription and ad-based revenue streams.
``Together, the two companies will be able to provide the most compelling and diversified suite of integrated marketing solutions around the globe, including branding, paid placement, graphical ads, text links, multimedia and contextual advertising,'' Yahoo chief Terry Semel said in a statement.
Under the system employed by Overture, formerly known as GoTo.com, advertisers bid for the right to have their links displayed under specific search terms. The auction determines the order in which the links are displayed.
Pasadena, Calif.-based Overture licenses its results to a wide range of Web sites _ including Yahoo _ that take a cut of the fees generated whenever someone clicks on an advertiser's link displayed under in a section typically labeled ``sponsored results.''
The Yahoo-Overture deal calls for Overture shareholders to get 0.6108 shares of Yahoo! common stock and $4.75 per share. Overture would become a wholly owned subsidiary of Yahoo.
The deal requires regulatory and shareholder approval but could be completed by the fourth quarter, the companies said.