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Yahoo Buys Overture

$1.6 billion acquisition broadens search services.

Scarlet Pruitt, IDG News Service

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Yahoo says it is scooping up paid search service provider Overture Services in a $1.63 billion deal expected to ramp up competition in the search market.

Pasadena, California-based Overture is one of the leading commercial search providers, counting more than 88,000 advertisers in the first quarter of the year. With this acquisition, Yahoo hopes to fill out its search offerings, including pay-for-performance search, company representatives say. Yahoo also plans to tap into Overture's client base to sell advertising and online marketplace services.

Family Grows

In February, Overture agreed to acquire search technology company AltaVista for $140 million. Those assets are now expected to fall into Yahoo's hands as well.

Yahoo has been committed to bolstering its search offerings. Last December, it cut a deal to acquire Web search technology company Inktomi for $235 million.

Yahoo representatives say commercial search is one of the fastest growing segments of the Internet advertising market. Citing figures from Piper Jaffray, Yahoo says the market is expected to grow from $2 billion by the end of this year to $5 billion by 2006.

By bolstering its search services and technologies, Yahoo is hoping to become a leading player in the market, taking on search titan Google.

Approval Due

The Overture buy is subject to custom closing conditions, including regulatory approval, Yahoo representatives add.

If the deal goes through, Overture will be a wholly owned subsidiary of Yahoo, which will continue to be headed by Ted Meisel, Overture's current president and chief executive officer.

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