Overture Sags as Exec Defects to Yahoo!

Shares in Overture Services OVER stumbled Tuesday on news of an impending executive departure.

Tim Cadogan, an executive who has worked on building partnerships with the Web sites that carry Overture's pay-per-click search engine, is leaving to join Overture's biggest such partner: Yahoo! YHOO.

The news, reported Tuesday morning by SoundView Technology Group analyst Jordan Rohan, hurt Overture's shares to an extent that a departure of the company's chief executive might have. Citing concerns about Overture's partner relationships and increasing competition, Rohan cut his price target from $29 to $22.

After falling as much as 8%, shares were trading at $21.94 Tuesday, down $1.45, or 6.2%. (Rohan rates the stock underperform; SoundView hasn't done banking for Overture.)

The stock's decline illustrates continuing investor jitters about the pay-per-click advertising firm's business model. While Overture has enjoyed success that's atypical for both Internet and advertising-dependent businesses, detractors of the company's stock say Overture is at the mercy of the Internet properties, such as Yahoo!, on which Overture's search engine appears.