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Yahoo Buys Overture for $1.63 Billion
securitas writes "Today Yahoo announced it plans to buy search technology company Overture for $1.63 Billion. The move is seen as a way to compete with rivals like Google and MSN, especally in the paid search and advertising category. This takeover occurs following this article about Google and Overture's race to secure partners for its paid search advertising. Other reoprts at CNN Money, ZDNet/CNet, AP via the Washington Post, Reuters, Bloomberg and Dow Jones via Yahoo. Press release at Overture and Yahoo."
Where the heck did Yahoo get 1.63 Billion
If there is nothing left worth living, what are you willing to die for?
Yahoo should have saved its pennies. Sure, buying Overture improves its position in the paid placement portion of the search market, but what Yahoo really needs is a search function that is on par with Google. People have been defecting from using Yahoo as their primary search engine for years, and they're not about to come back unless Yahoo can offer search results that are comparable to Google.
This acquisition isn't likely to help Yahoo do what it needs most: better searching. Until they achieve better search results, people are going to continue to defect to Google and its brethren.
I don't really use Google because it returns better results. I mean, it returns pretty good results. I manage to find what I need. But I really use Google because, while they do have advertising, their advertising is not obnoxious. It doesn't pop-up, blink, animate, or pretend to be legitimate search results or articles. It *does* occasionally actually pertain to what I'm looking for, as opposed to Yahoo's continued insistance that I need to lose weight and find a man... using, of course, the insanely-expensive Ediets and Yahoo! Personals.
So, in the end, Google would win even if it took me a few minutes longer to find what I wanted, because I can *bear* spending a few minutes on Google. Ten seconds on Yahoo, and my eyes are bleeding.
According to this morning's Wall Street Journal, what we are seeing right now with the NASDAQ is consistent with previous boom and bust investment cycles. It seems that there is a big runup, a big fall, and about 2.5 to 3 years later, a revisiting of the now-despised investments. Eventually, that residual boom dies off too. The expert they cited in the story figures the NASDAQ will peak at around 2400, well above its current 1750-ish level.
Before this is modded offtopic, what this means is that Yahoo!, which has enjoyed a tremendous runup in this recent boom now has some cash to invest. Looks like they are trying to do some expansion like back in the good ol' days when we had AOL buying Time Warner. Look for some other mergers and acquistions unless or until this boomlet ends.
In principio erat Verbum.
You've never heard of overture?
;) ...and they probably will, considering how high some of those PPC bids are. Last time I checked, web hosting was like $3-$5 dollars a click! It's ridiclous, but you have to do some of that if you are a small company that doesn't have your site at the top 10 or even 20, which is pretty hard to do on your own.
They used to be GoTo.com, but they changed their name to Overture a while back. They are not really a search engine--they are more of a pay-per-click advertising technology that is integrated with pretty much every search engine except Google.
Or, you could just check it out for yourself.
What are they hoping to get out of Overture? More than 1.63 billion
This is the latest in a series of buyout announcements that have come along in the last few weeks. It looks like the business community is preparing for economic recovery and these deals are meant to position themselves all the better for it. Most significantly, these deals are coming from several different industries:
Peoplesoft & JD Edwards (software)
Oracle & Peoplesoft (software)
Lehman Brothers & Neuberger Berman (finance)
Yellow Freight & Roadway (trucking)
Boise Cascade & Office Max (office products)
Let's see what the next few months bring, but the mood is definitely shifting.
Stop by my site where I write about ERP systems & more
Yahoo seems to have lost the search war. And that doesn't seem to be a problem. Their search engine is their least compelling feature right now (well, second least compelling, right after the shopping section).
:P
Yahoo!Mail has, at least from what I can see, displaced Hotmail as the General Free E-Mail Provider Of Choice. (It absolutely amazes me Microsoft.) Now, i'm not a marketing research agency-- ll i have to work with is single data points, but I never hear anyone say "check my Hotmail" anymore. I hear "Check my Yahoo!Mail" a lot. And it seems to me that all 5,634 of my 11-year-old sister's friends use Yahoo Mail. They seem to act as some kind of borg-like unified swarm. And Yahoo!IM seems set to lose that war in the long run, but they aren't doing bad, for now. Certainly doing better than MSN messenger. And their news service is passable.
And all I know is, as long as Yahoo.com provides me a place where I can play scrabble on the internet, I'll keep coming back
Basically, they seem to be turning into the first non-shit instance of this mythical "portal" thingy everyone kept talking about during the dot-com bubble. For that, they need A search functionality, but they don't necessarily need perfect search.
(P.S. i don't know about you but i never heard ANYONE use 'yahoo' as a verb except in Yahoo.com advertising)
Can they beat Google? Hell no, never. Can they beat MSN? I'd bet money that they will.
Yahoo! did not buy a "search engine" they purchased a company that provides a Pay Per Click advertising mechanism that is most likely very profitable. I can say that they they get a pretty good chunk of my advertising budget every month.
These are examples from my business. Using the same basic keywords.
google: $2.85 average cost per click
overture: $.95 average cost per click
Which one of those makes more sense to you from a business perspective?
Answer: It depends on who you're talking about. Overture is a wonderful thing to hand to a PHB to make him feel good. It has everything that PHBs love. Gambling, bluffing, seemingly high stakes, and best of all, it counts as "work". I'll never forget the look on my boss' face when I was leaving the company and told him that he would have to (read: get to) control the Overture listings. At that time, Overture had recently gone to a flexible pricing structure, meaning that if you bid $1.00 for a keyword, and your nearest competitor bid 75 cents, and the next bid 50 cents, you would pay 76 cents (1 penny more than the next highest bid), your competitor would pay 51 cents, et al. I was able to devise (at least, that's what I told him I did, after vast amounts of "research"; in reality, I think most dummies could figure this out) a plan. Storm into keywords with bids of upwards of $1.50, where the next highest bid would be in the 20 cent range. The companies bidding 20 cents aren't going to jump you up to $1.51, and you end up only actually paying 21 cents, while scaring off any serious bids to overtake you. Then, and here's where the gamesmanship and paying attention come in, if someone pulls the same thing on you, you bid $1.49 to their $1.50. Now every click costs your competitor $1.50, and only costs you 21 cents, even though you're in second. Bleed them dry. But watch out that they don't drop to $1.48 and turn the tables. My PHB loved this crap. He would sit and click refresh on the bid page just to make sure that Hated Company X wasn't pulling a fast one. Kept him off my back the last week I was there, and I'm sure he's still at it.
All that said, I found Overture to be a gigantic money suck, apparently a good enough one that Yahoo! would like it for themselves. Any industry with decent penetration has enough competition that bidding will get ridiculously out of hand. And I had a pretty good idea that our paid-for-listings on the likes of Yahoo were just cannibalizing the clicks from our actual search listing on Yahoo, and costing us 50 cents a click. Overture may be pretty much idiot-proof, but there are any number of free and relatively easy ways to increase traffic, if you've just got a little time and energy to put into it. So, if Overture changes, or dies, or melds into Yahoo, the PHBs (and those who deal with them) may be disappointed, but those with the ability to do a little actual work shouldn't actually care.