Yahoo! To Buy Overture; Acquisition Positions Yahoo! As The Largest Global Player In The Rapidly Growing Internet Advertising Market-3
Monday, July 14, 2003 10:13 AM ET Printer-friendly version
In a press release Monday, Yahoo said the acquisition of Overture, Pasadena, Calif., positions the portal as "the largest global player in the rapidly growing Internet advertising sector."
The companies could offer integrated global marketing services such as branding, paid placement, graphical ads and text links. In particular, Yahoo hopes to expand contextual advertising in sports, real estate and autos.
The purchase also furthers Yahoo's focus on increasing advertising revenue from search services, especially in shopping, travel and yellow pages categories. Overture currently has more than 88,000 advertisers globally to whom Yahoo plans to market additional online services, such as Web hosting and the Yahoo Store retail platform. Overture also has an "extensive" affiliate distribution network.
The purchase price, net of Overture's March 31 cash balance and the amounts earmarked for recently closed transactions, is $1.52 billion. In late April, Overture bought AltaVista Co. from CMGI Inc. (CMGI, news) for $106.6 million in cash and stock.
Yahoo, which recently acquired Web-search firm Inktomi Corp. (YHOO, news), said the Overture deal will permit immediate product expansion in Europe, Korea and Japan, where both companies have a strong presence.
Overture will become a wholly-owned subsidiary of Yahoo, and its operations will remain in Pasadena. Ted Meisel, Overture's chief executive, will continue to head its operations. He'll report to Dan Rosensweig, Yahoo's chief operating officer.
The transaction, subject to regulatory approval and the approval of Overture's stockholders, is expected to close by the fourth quarter.
Overture shares recently traded at $22.80, up $1.29, or 6%. Yahoo stock was up 31 cents, or 1%, on composite volume of 900,000 shares. Average daily volume is 14 million shares.
-Pamela Tate; Dow Jones Newswires; 201-938-5400
Dow Jones Newswires
07-14-03 1013ET
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