Yahoo to buy Overture for $1.63B

The deal is expected to boost competition in the search market

By Scarlet Pruitt, IDG News Service

July 14, 2003 12:00 PM ET

IDG News Service - Yahoo Inc. said today that it is scooping up paid search service provider Overture Services Inc. in a $1.63 billion deal that's expected to ramp up competition in the online search market.
Pasadena, Calif.-based Overture is one of the leading commercial search providers, with more than 88,000 advertisers in the first quarter of the year. Yahoo said that with the acquisition it hopes to fill out its search offerings, including pay-for-performance search, and tap into Overture's client base to sell advertising and online marketplace services.
In February, Overture agreed to acquire search technology company AltaVista Co. for $140 million (see story); those assets are now expected to fall into Yahoo's hands.
Sunnyvale, Calif.-based Yahoo has been committed to bolstering its search offerings, having also recently acquired Web search technology company Inktomi Corp. for $235 million (see story).
Yahoo said that commercial search is one of the fastest growing segments of the Internet advertising market. Citing figures from U.S. Bancorp Piper Jaffray, Yahoo said that the market is expected to grow from $2 billion by the end of this year to $5 billion by 2006.
By bolstering its search services and technologies, Yahoo is hoping to become a leading player in the market and take on search titan Google Inc.
The Overture buy is subject to custom closing conditions, including regulatory approval, Yahoo said. If the deal goes through, Overture will be a wholly owned subsidiary of Yahoo and will continue to be headed by Overture President and CEO Ted Meisel.

Reprinted with permission from

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