Paid search leader Overture Services
announced a two-year deal to provide paid listings results on ESPN.com, while Inktomi will handle its Web and site search.
The exclusive deal calls for Overture to return up to seven paid search results on ESPN.com’s search site that will appear in custom boxes. The paid listings will be part of an overhaul of ESPN.com’s site-search function, which had featured a homegrown keyword capability. With the keyword search, a query for “Yao Ming” takes a user immediately to the basketball star’s player profile page. Now, through a partnership Overture struck with Yahoo!’s Inktomi, the same query will return both site and Web search results, as well as Overture’s paid listings.
“They looked very carefully at a set of solutions on the market and chose Overture,” said Bill Demas, Overture’s senior vice president and general manager for affiliate business. “For us this is another direct win against Google.”
In addition to notching a win against rival Google, the ESPN.com deal will pad Overture’s affiliate network, which the company wants to expand beyond its partnerships with mega-portals Yahoo! and MSN. In December, Overture signed a deal to provide paid listings to CNN’s family of Web sites. The company also has partnerships with CNET Networks.
Overture listings already appear on Web searches generated from ESPN.com, which is the sports information provider for the MSN network and carries MSN search windows throughout the site. ESPN.com is the top-rated sports site on the Internet with about 13 million unique visitors in December 2002, according to Nielsen//NetRatings.
Demas said Overture was executing its strategy of tapping into the 60 to 65 percent of the U.S. search market that it estimates are dominated by non-commercial listings, including searches on news and information sites.
“The whole category is poised for growth,” he said.
Overture has also looked abroad, where the paid-listings market is just beginning to take hold. In December, Overture beat out Google and renewed its partnership with top British ISP Freeserve. The company also has deals in France, Germany and Japan.
Expanding its revenue base is an important task for Overture. Last month, it announced that its fourth-quarter financial results, which will be released Thursday, would include higher customer-acquisition costs. The reason: Overture has been deriving a bigger chunk of its business from its deals with Yahoo! and MSN, which get a bigger share of the revenues generated compared to smaller Overture partners. The partnerships are even more important since AOL’s decision last May to switch its paid listings partnership to Google.
Some analysts have expressed concern that Overture is over-reliant on its partnerships with MSN and, in particular, Yahoo!. Last quarter, the two portals accounted for 63 percent of Overture’s revenues.
While Yahoo!’s contract with Overture runs until April 2005, the portal has made moves that some have interpreted as a possible threat to the renewal of the partnership, which generated $120 million for the company last year.
In December, Yahoo! paid $235 million for Inktomi, a search technology and paid placement provider. While it was initially thought that this would mean Yahoo! would replace Overture rival Google as its algorithmic search provider, the waters were muddied by the announcement last week that top Overture search executive Tim Cadogan was defecting to head up search services at Yahoo!, raising the question of whether Overture would be replaced, as well.
Both companies downplayed the move, saying their relationship remained strong.