This Day On The Street
Continue to site
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

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.


The all-in-one strategy makes sense, says Danny Sullivan, editor of, 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 - Get Report) MSN.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MSFT $46.63 0.00%
YHOO $30.85 0.00%
AAPL $110.78 0.00%
FB $94.01 0.00%
GOOG $641.47 0.00%


Chart of I:DJI
DOW 16,776.43 +304.06 1.85%
S&P 500 1,987.05 +35.69 1.83%
NASDAQ 4,781.2640 +73.4890 1.56%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs