Overture Chief Sees Clear Sailing Ahead
One of the key benefits of the Yahoo! deal to Overture, suggests Meisel, is the security it gives Overture. And that's not simply dollars and cents, but the amount of Internet traffic that Yahoo! will supply to Overture in coming years.
"The logic for the deal, from Overture's side, was to eliminate some uncertainty associated with Yahoo!'s participation in the network," says Meisel, "and gain contextual advertising opportunity." Doing the merger, says Meisel, creates "certainty" that allows Overture to continue to invest in new products "at a pretty rapid rate." In the past, Overture's stock has risen and fallen on news that partners supplying major amounts of traffic to Overture were staying with, or departing from, Overture's affiliate network.
Contextual advertising, which Google and Yahoo! have launched in recent months, enables marketers to place advertisements not only in search engine results -- but also on nonsearch pages in which the advertisement, ideally, bears some relationship to the editorial content on the page. Thus, in theory, an ad for New York Mets memorabilia might come up on the same page as a story about Gary Carter's admission to baseball's Hall of Fame.
Overture officially launched its contextual advertising service only a month ago -- it has high hopes -- with Meisel saying it appears to be a multibillion-dollar market like search.Because search and contextual advertising are both big markets, says Meisel, "We were comfortable that if there were to be any losses in the network, they could be offset by what we were able to do with Yahoo! and through the certainty of developing better products -- the ability to get them into the hands of partners."
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