Google Making More Inroads on Overture

When Overture Services (OVER Quote) got hit by a big piece of bad news last week, a smaller piece of bad news got lost in the shuffle.

That's the contention of one analyst who follows Overture, the strong-performing pay-per-click search engine company that cut its earnings forecasts last week.

While investors punished Overture for Wednesday night's lowered guidance, they likely overlooked an acquisition that Google, the privately held rival to Overture, announced that same day. But Google's deal to acquire California software company Applied Semantics strikes additional blows to Overture's business, says Derek Brown, an analyst at Pacific Growth Equities.

Overture says Google's Applied Semantics acquisition isn't as significant as Brown makes it out to be. But as Overture makes acquisitions of its own to expand into new markets, the Google deal, at the very least, illustrates the competitive forces at play behind Overture's scaled-down expectations. ...