Overture Sews Up Top UK, France ISPs

With the battle for dominance in the paid search market increasingly moving overseas, paid search leader Overture Services scored an important win Friday, renewing its deal with the Freeserve, the United Kingdom’s No. 1 Internet service provider, and expanding it to include Wanadoo, the largest ISP in France.

The Freeserve deal replaces a temporary extension that was due to expire at the end of next month. The new agreement makes Overture the exclusive provider of commercial search on Freeserve, which is the UK’s largest ISP with 2.5 million subscribers. Additionally, Freeserve’s parent company, Wanadoo, a subsidiary of France Telecom , expanded the Overture relationship to include its ISP properties in France, Wanadoo and voila.fr. Wanadoo is the top ISP there, serving nearly 8 million subscribers. Wanadoo’s French sites have not previously carried paid listings.

Financial terms of the deal were not disclosed. An Overture spokesman said the agreement’s duration was “at least two years.”

“These strategic partnerships represent a significant step forward as we widen the global footprint of our search distribution network,” said Johannes Larcher, Overture International’s general manager.

Larcher said the expansion of the contract was a big win, especially since it came up against bidding from Google and European paid search provider eSpotting.

The contracts come at an important time for Overture, which has seen its unquestioned dominance in the lucrative pay-for-performance search business challenged by Google, which entered the market earlier this year. Google then swooped in to take away Overture’s contracts with Earthlink, Ask Jeeves, and, most importantly, AOL.

Overture remains the leader in the space, however. It has deals with top portals Yahoo! and MSN, 73,000 advertisers, and projected annual revenue of $658 million.

With the U.S. market increasingly spoken for, Overture and Google have battled for footholds overseas, where they see the biggest potential for expansion of the paid-search model. While Google has a strong presence in both Europe and Asia for providing its algorithmic search services, Overture has a longer track record of pushing paid search in those areas.

The Freeserve partnership is Overture’s most important in Britain, where it opened an office more than two years ago. Overture boasts of reaching 80 percent of UK Internet users through its partnership deals, including agreements with MSN’s local site and AOL Europe.

In September, the company launched in France, and the Wanadoo deal puts the company’s reach in the French market at 89 percent. Overture also has deals with Lycos Europe, T-Online, and Tiscali.

In addition to markets abroad, Overture has worked to expand commercial search beyond portals and ISPs. Earlier this month, the company signed a three-year deal to provide paid search listings for three CNN Web sites.

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