George Mannes
Is Yahoo! YHOO making an overture for Overture Services OVER? That's the burning question Friday morning, following Yahoo!'s late-night announcement Thursday that it had priced $750 million in convertible bonds. The Internet media and services company, which has $1.5 billion in cash on hand and generated $221 million in free cash flow in 2002, wouldn't appear to require more cash unless it were about to make a major acquisition. And that scenario has led some to speculate that the likeliest suspect for Yahoo! to acquire is Overture, the fast-growing paid search company. On Friday morning, Overture's shares rose 76 cents, or 6%, to $13.47, while Yahoo!'s shares fell 46 cents to $23.88. A Yahoo! spokeswoman acknowledged Friday morning that the money could be used for "future potential acquisitions," but declined to be more specific about potential targets, such as Overture. "We don't speculate on [mergers and acquisition] activity," she said. An Overture spokesman said, "We never comment on market speculation and rumor." Overture's shares, battered by concerns such as its dependence on major business partners -- chiefly Yahoo! and Microsoft MSFT -- are trading at lows last seen in September 2001. Overture's stock has lost 50% of its value since the beginning of the year.
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