Margins May Tell Overture Story
Overture Services (OVER Quote) investors are worried about business that the Internet company might lose. But maybe they should worry instead about the business the company might win.
Shares in Overture, formerly known as GoTo.com, plummeted earlier this month after news broke that the remarkably successful online advertising firm lost a distribution deal with EarthLink (ELNK Quote) to search engine Google. The stock has since regained most of that ground and closed Friday at $30.93.
But maybe people are focusing on the wrong risk, says one investor who is betting that the price of Overture's shares will fall. Instead of fearing that Overture's pay-per-click search engine will lose its presence on sites such as Yahoo! (YHOO Quote) and AOL Time Warner's (AOL Quote) America Online, investors should instead worry about the money Overture might have to spend to keep its place. ...
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