Overture Reaches Out and Investors Flee
How MSN and Yahoo! (YHOO) react to the deal is evidently a major concern of investors. Yahoo! recently signaled its own entry into the algorithmic search business with a deal to acquire Inktomi (INKT), and Microsoft was rumored to be interested in making its own algorithmic search acquisition, says Sullivan.
In response to an analyst's question Tuesday about partners' reaction to the news, Meisel said, "We simply haven't run into any concerns."
Overture, which earlier this month forecast 2003 full-year earnings per share in the range of 90 cents to $1.05, cut its forecast to a range of 60 cents to 70 cents. The acquisitions should be accretive to earnings by mid-2004, says Overture, and should, at a minimum, be neutral to earnings for full-year 2004.
Ethan McAfee, an analyst at Capital Crossover Partners, said that following Tuesday's drop, Overture's stock "is looking much more attractive." McAfee said he had no current holdings in Overture, though he has invested in the company in the past. "Five years from now, the
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