agreement to purchase Overture Services
has spurred new interest in the future of FindWhat
, a paid search provider that has focused on building a network of distribution partners among second-and third-tier search sites like Dogpile and Excite.
With the search industry’s consolidation seemingly set to continue, FindWhat, which just a year ago was a little-known search company, is now mentioned as one of the most intriguing standalone search companies left.
“It’s definitely a big shift,” said Craig Pisaris-Henderson, FindWhat’s chief executive, about the new industry landscape now that Yahoo! has moved to acquire Overture Services. “If you think about it, the No. 1 and No. 2 search players [Google and Yahoo!] have their own in-house search product.”
That would leave the No. 3 search player: Microsoft’s MSN. The search industry has buzzed with talk of what MSN will do now that Yahoo! is poised to control Inktomi and Overture, the providers of its core search services.
Now, Fort Myers, Fla.-based FindWhat has gained notice as a possible acquisition option for MSN in its efforts to catch up with Yahoo! and Google. FindWhat recently undertooka $163 million merger with European paid listings company Espotting Media. (On Wednesday, FindWhat announced the completion of a private placement stock offering that raised $20.3 million. The company said it would undertake such a sale to help pay the costs of the Espotting merger.)
“MSN’s going to take a really hard look at them,” said Danny Sullivan, editor of Search Engine Watch, which is a sister publication of this Web site. “They’re in a very good position if MSN decides it needs an option.”
Pisaris-Henderson, while declining to comment on any potential merger, said he believes MSN has plenty of time to figure out its next move. After all, the Overture deal will not close until the end of the year and the relationship is still beneficial to the money-losing portal.
He said MSN eventually would decide to do what Yahoo! and Google have already done — acquire an in-house paid search capability, either by building or buying it.
“At the end of the day, MSN is in the same position Google and Yahoo! are in,” Pisaris-Henderson said. “If they launch their own pay-for-performance product, it will not take them long to build the kind of service Yahoo! and Google have.”
One option for MSN would be FindWhat’s private label service, which allows a portal to operate its own paid listings network while FindWhat handles the backend infrastructure and customer service. The portal only takes care of sales.
“It’s an option for the larger branded companies to have an in-house product without having the headaches of running a pay-for-performance program,” Pisaris-Henderson said.
So far, FindWhat has signed up Lycos for the service, allowing the portal to run its own program in exchange for sharing some of the revenue with FindWhat. While Overture and Google cut great deals to gain portal partner — Overture’s MSN deal is generally believed to give MSN 70 percent of the take — the payout for a private label service is much better, Pisaris-Henderson said.
“We’ve been saying for a year and half now that the larger players will go to an in-house solution,” he said. “There’s money being left on the table.”