Search Engine News Blog Headline

15 July 2003

Yahoo Confirms Overture Buyout Rumor

Search giant Yahoo! today confirmed recent rumors of a take-over bid for pay-per-click search engine Overture, announcing the company would acquire Overture for USD 1.63 billion in cash and shares.

The announcement is a serious wake up call for the remaining players in the search industry, given the amount of consolidation that has happened in the past six months.

>> Yahoo's acquisition of Overture gives the company the algorithmic search resources of AltaVista and AllTheWeb (bought by Overture earlier this year), as well as a key foothold in the lucrative pay-per-click search market, currently dominated by Google and Overture.

The buyout is expected to hit Microsoft hardest of all, because they are in the throes of developing their own algorithmic search engine and rely on Overture for the supply of paid search listings to their MSN Search site. Yahoo are considered to be one of their biggest rivals and they will probably be unwilling to continue the paid search relationship they have with a Yahoo-owned Overture. Meanwhile the future of Google is also likely to be affected, with Yahoo owning a small stake in the search engine and currently using Google search results in combination with their own directory listings.

Will Yahoo dump Google now they have the resources of AltaVista and AllTheWeb? Or will Yahoo use their partnership with Google in a search war against Microsoft? Will Google postpone an IPO as a result of the news? Or will Microsoft make Google an offer they can't refuse and acquire them, leaving an industry dominated by two players? The next few months will likely reveal all.

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