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Yahoo! Japan Inks Deals With Overture, Google

Yahoo!'s Japanese subsidiary announced Monday it has signed deals with rival paid-search providers Overture and Google for both to provide listings for Japan's most-visited site, Yahoo! Japan.

For Pasadena, Calif.-based Overture, its 18-month, non-exclusive agreement gives it a presence on four top search sites in the Japanese market, following Overture's earlier deals with Infoseek Japan, Lycos Japan and NTT-X's goo.com. Overture also has a six-month test agreement with MSN's Japanese sites.

Those deals serve as anchors for Overture's upcoming launch of a Japanese-language search business in December, which continues the company's strategy of deploying regional listings engines in the United Kingdom, Germany and France.

Mountain View, Calif.-based Google's deal with Yahoo! Japan, on similar terms as Overture's, expands its previous agreement with the portal to provide algorithmic search results. In addition to its enlarged agreement, Google has deals with NEC/BIGLOBE and Excite Japan to provide paid listings.

Yahoo! Japan, which had not previously shown paid listings, will alternate between displaying Overture and Google results.

Both of the paid-placement search companies claimed victory with their respective Yahoo! Japan deals.

"Google was incumbent in the Japanese market," said Johannes Larcher, Overture International's general manager. "We feel very good that we are taking away real estate from Google with this deal."

Google's senior vice president of worldwide sales, Omid Kordestani, crowed that the company had tightened an important global relationship with Yahoo!.

"Google's sponsored links will enable Yahoo! Japan to generate additional online advertising revenues, while provide its users with relevant, useful information," he said.

Since it barged into the paid-listings market early this year, Google has established itself as Overture's No. 1 competitor in the lucrative paid-listings market, generally thought of as the Internet advertising industry's most successful sector. When it snared AOL in May, Google showed it would provide fierce competition to incumbent Overture. Google had already taken away former Overture client EarthLink earlier in the year.

With the U.S. search market increasingly spoken-for, Overture and Google have taken their battle abroad. Overture has its strongest presence in Europe, where it launched in the United Kingdom two years ago. In the UK, Overture has deals to reach 80 percent of Internet users; in Germany, its reach is 73 percent; and in France, which launched only recently, Overture reaches 65 percent of Net users.

In June, Overture announced it would make its first foray into Asia by setting up a Japanese subsidiary, Overture KK. Google established a presence in Japan earlier, opening a Tokyo office in 2001 and releasing a Japanese language version of its AdWords product in July 2002.

As the No. 2 Internet market in the world, with 60 million Internet users, Japan is an important market for both companies, as paid search just begins. And within Japan, Yahoo! Japan is an 800-pound gorilla. Yahoo!'s Japanese site garners the most at-home users of any site in Japan, more than doubling the No. 2 site. According to Nielsen//NetRatings, yahoo.co.jp had a unique audience of 18.6 million in September, giving it a 73 percent reach.

Representatives from both Overture and Google said the sheer size of Yahoo! Japan convinced them to accept a deal in which each company's paid listings would be shown. While not the norm, the two rivals have shared partners before, as in the case of InfoSpace.

"We were glad to let Yahoo! Japan have a flexible relationship," Kordestani said.

Yahoo and its affiliates have relationships with both companies. Overture has a three-year deal to provide paid listings for Yahoo!'s North American site, while Google provides algorithmic search results for a variety of Yahoo! Sites worldwide.