gave new details on its ambitious international expansion plans on Monday, as the company seeks to steal a march on Google in the nascent paid search market abroad.
The paid search company, which has been under fire with the success of rival Google, said it would enter seven new markets this year, beginning with the official launch of its Korea operations in the next two weeks. The new operations, in both Europe and Asia, will join Overture’s presence in the United Kingdom, France, Germany and Japan.
The international push is part of Overture’s plan to take on Google in international paid search markets, which are far less mature than the U.S. paid search market. Overall, paid search will generate about $2.1 billion this year, according to U.S. Bancorp Piper Jaffray. By 2007, the investment bank expects the market to be worth $7 billion.
In 2003, Overture expects its international business will bring in $125 million in revenue, rising to $300 million in 2004. Its UK operations have been profitable for four straight quarter, and the company expects new markets to reach profitability in four to six quarters.
The new operations will continue to diversify Overture’s revenue base, which has worried some financial analysts because of its reliance on Yahoo! and MSN for two-thirds of its revenue.
To support the expansion, Overture announced the opening of a search services and operations center at its European headquarters in Dublin, where it has 100 staffers working in editorial, customer service, accounting and tech support. Overture’s Pasadena, Calif., headquarters previously provided editorial and customer service for European markets.
“Global expansion is a key growth strategy for Overture and we are committed to developing a complete and scalable infrastructure to support this goal,” said Johannes Larcher, Overture International’s general manager.
In Korea, Overture has already established a strong foothold for its launch, having sewed up paid listings deals with both MSN Korea and Daum Communications, which operates the No. 1 portal there. Along with a deal with a smaller portal, Overture has said it will reach 92 percent of the Korean market.
Overture plans to follow up its Korea launch with an entry into Italy by the middle of the year. Further European expansion is planned for 2003 in Austria, the Netherlands, Spain, Switzerland and Scandinavia.
Overture CEO Ted Meisel tabbed international expansion as a top priority — even at the cost of lowering its short-term profits.
So far, Overture has held its own in international markets where Google has been an established presence. In both the UK and France, Overture inked deals with the top portals, while it split a paid listings deal with Google for Yahoo! Japan.
In Europe, Overture also has competition from UK-based Espotting Media, which has operations in the UK, Ireland, France and Germany. Espotting has plans to expand to Spain and Italy this year, too.
In addition to paid listings, Overture hopes to leverage the international credentials of its recent algorithmic search acquisitions, Alta Vista and the Web search unit of FAST Search and Transfer.