Jul 17th 2003
“We did this not for defensive but for opportunistic offensive reasons,”
insists Dan Rosensweig, Yahoo!'s chief operating officer, who is
overseeing the acquisition of Overture, an online advertising firm, for
$1.6 billion.
The ground being fought over is located on the results pages of internet searches.
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Overture, launched in 1997 as GoTo.com, pioneered this advertising
model, variously known as “paid search” or “pay-per-click”. Its main
service is as an auction room for advertisers, whose bidding determines
how prominently their link is displayed. Overture then gives these lists
to such clients as Yahoo!, and shares with them the advertising
revenues once the clicking starts. The total paid-search market is now
worth some $2 billion a year, compared with about $8 billion for other,
more conventional online advertising, and it is growing furiously.
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