Search Engine News Blog Headline

19 February 2003

AltaVista Snapped Up By Overture

Internet search company Overture made the shock announcement today that it would be purchasing search portal AltaVista from CMGI Inc. for $140 million in cash and stock.

In their end of the deal, to be completed in April, Overture will pay AltaVista in common stock valued at $80 million, plus $60 million in cash and assume certain AltaVista liabilities. The deal represents a strategic move by Overture to expand their current product offerings outside the realm of pay-per-click and to start competing with rivals such as Google and Yahoo in the mainstream algorithm-based search market. 

>> According to Overture's Media Release on the announcement:

"The acquisition will enable Overture to offer a significantly enhanced Web search solution to portals, Internet service providers (ISPs) and other destination sites, as well as additional marketing opportunities to the company's large base of advertisers." 

According to observers, Overture plans to license AltaVista's technology to its customers, which include Yahoo, MSN and AOL Europe. Overture also will use AltaVista.com to test new search services and marketing products for its advertisers. In a conference call to investors, Overture president and CEO, Ted Meisel, said that AltaVista would open additional revenue streams for Overture and build on its pay-per-click advertising by giving marketers the option to participate in AltaVista's paid-inclusion program. 

With Yahoo supposedly developing their own in-house paid listings program and moving into Overture's paid search market territory, and now Overture making their foray into the algorithmic search industry, it's abundantly clear that search continues to be the major area of growth in the online advertising industry.