This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Overture Reaches Out and Investors Flee

As a result of the new deals, Overture says it will be able to offer two new types of search products: One is algorithmic search, or listings in which order is determined not by payment, but by relevance based on proprietary formulas as applied in an automated process. The other is paid inclusion, in which businesses pay for their sites to be regularly examined for inclusion in an algorithmic search engine, though placement isn't guaranteed.

Both AltaVista and FAST operate algorithmic search engines and offer paid inclusion services.

On a conference call with analysts Tuesday, Overture chief Ted Meisel said the deal would ensure that the company has "a full search solution" for online affiliates who want it. "Overture is positioned to build and syndicate the best, most powerful search experience on the Internet, bar none," he said.

Other payoffs of the deals, indicated Meisel, are AltaVista's patent portfolio, FAST's "extremely well-engineered, cutting-edge" technology platform, and FAST's presence in Europe and other international markets, into which Overture has been speeding up its expansion.

Redundancy

The all-in-one strategy makes sense, says Danny Sullivan, editor of SearchEngineWatch.com, a Web site that focuses on the search engine industry. The company likely lost partnership agreements with EarthLink (ELNK) and AOL Time Warner's (AOL) U.S. America Online service last year because it couldn't offer both pay-per-click and algorithmic search services, Sullivan says. Both those losses hammered Overture's stock.

But if that were the only motivation, says Sullivan, a purchase of either FAST or AltaVista -- not both -- would have sufficed. "Buying two is overkill," Sullivan says. Acquiring one company, he says, would have helped Overture complete the puzzle in its business. "To have both of them is a piece that someone else needs to complete their puzzle."

That someone else, says Sullivan, could be either a competitor, such as European pay-per-click search engine operator Espotting, or an Overture customer, such as Microsoft's (MSFT) MSN.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,982.59 +22.02 0.13%
S&P 500 1,978.91 +0.57 0.03%
NASDAQ 4,444.9090 -4.6550 -0.10%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs