Yahoo! and Overture announced this morning that they had closed a deal under which Yahoo! will acquire Overture outright for $4.75 in cash plus 0.6108 in shares of Yahoo! stock for each share of Overture stock. The deal is being valued at 1.63 billion dollars and will complete in the fourth quarter of this year.
Key to the deal is Patent ‘361, which was awarded to Overture in July 2001, when it was still known as GoTo.com.
United States Patent 6,269,361
Davis, et al.
Awarded July 31, 2001
ystem and method for influencing a position on a search result list generated by a computer network search engine
A system and method for enabling information providers using a computer network such as the Internet to influence a position for a search listing within a search result list generated by an Internet search engine. The system and method of the present invention provides a database having accounts for the network information providers. Each account contains contact and billing information for a network information provider. In addition, each account contains at least one search listing having at least three components: a description, a search term comprising one or more keywords, and a bid amount. The network information provider may add, delete, or modify a search listing after logging into his or her account via an authentication process. The network information provider influences a position for a search listing in the provider’s account by first selecting a search term relevant to the content of the web site or other information source to be listed. The network information provider enters the search term and the description into a search listing. The network information provider influences the position for a search listing through a continuous online competitive bidding process. The bidding process occurs when the network information provider enters a new bid amount, which is preferably a money amount, for a search listing. The system and method of the present invention then compares this bid amount with all other bid amounts for the same search term, and generates a rank value for all search listings having that search term. The rank value generated by the bidding process determines where the network information providers listing will appear on the search results list page that is generated in response to a query of the search term by a searcher located at a client computer on the computer network. A higher bid by a network information provider will result in a higher rank value and a more advantageous placement.
Yep. Overture INVENTED pay per click. This will be interesting.
Yahoo! to Acquire Overture
Acquisition Positions Yahoo! as the Largest Global Player in the Rapidly Growing Internet Advertising Market
Combines Leading Web and Commercial Search Services With Internet’s Largest Global Audience
Sunnyvale, CA & Pasadena, CA
July 14, 2003
The combined companies expect to be able to take advantage of a number of revenue synergies by expanding marketing opportunities on Yahoo!’s network through:
- expand Pay-for-Performance search faster and more cost effectively into vertical properties, such as shopping, travel, and yellow pages;
- integrate contextual advertising throughout Yahoo!’s network, including properties such as in sports, real estate and autos; and,
- leverage Overture’s efficient, scalable marketplace by offering its 88,000 advertisers, the majority of which are small- and medium-sized businesses, the ability to get online, sell online and promote online by purchasing a range of additional Yahoo! services such as Yahoo! Store and Yahoo! Web Hosting.
Yahoo! and Overture will be able to expand their combined products and services internationally to create a unique global marketplace. Immediate opportunities include Europe, Korea and Japan where both companies have a strong presence.
Yahoo ads to widen with Overture deal
By Steve Gelsi, CBS.MarketWatch.com
2:56 PM ET July 14, 2003
NEW YORK (CBS.MW)
Advertisers are bullish on Yahoo’s ability to provide them with more one-stop shopping for their needs through the Web portal giant’s plan to buy search rival Overture Services, two industry players said.
Yahoo to Buy Overture in $1.63 Bln Deal
Mon July 14, 2003 03:34 PM ET
By Ben Berkowitz
LOS ANGELES (Reuters)
One possible pitfall to the deal is that one of Overture’s biggest customers, MSN, Microsoft Corp.’s MSFT.O Internet service, could cancel its contract, analysts said.
“I would be worried that the other major partner of Overture, which is MSN, would now make moves to have their own paid search platform — organically or buy another,” Troy Mastin, analyst for William Blair & Co. said.
Overture’s Meisel told Reuters Microsoft has the right to abandon its contract if Overture undergoes a change of control. But Yahoo Chief Executive Terry Semel said the status of Overture’s relationship with Microsoft was not a main concern at the moment.