Yahoo! acquires Overture

15 Jul 2003

Dublin looks set to be at the eye of the next dotcom storm, playing host to two of the world’s biggest players – Yahoo! and Google – following Yahoo!’s acquisition yesterday of Overture for US$1.6bn. Overture is in the process of establishing an operation in Dublin, while Google announced its facility in the city earlier this year.

Overture, which has an operation in Dublin’s East Point Business Park, is widely regarded as one of the pioneers of internet advertising. The deal marks the latest in a series of acquisitions throughout an industry that is now regarded as restructuring, which is resulting in the creation of new internet blue chip players. While Yahoo! has bought internet search, online advertising and job listings services, rival InterActive Corp has mopped up online commerce companies.

Interestingly, Yahoo!’s purchase of Overture positions it for a head-on fight with Google for domination in the internet advertising business. After three steady years of decline, online advertising is projected to grow this year.

Overture is widely known to have devised the ‘sponsored search’ form of online advertising. The company sells businesses the right to advertise on the pages that return search results on sites such as Yahoo!, linking advertising directly to the subject of the searches.

In April, Overture announced plans to create 250 administration, marketing and sales jobs for its Dublin offices. A month earlier Google, the world’s most popular search engine, announced that it would establish its European headquarters in Dublin, creating more than 200 jobs.

Under the terms of yesterday’s deal, portal giant Yahoo! Has agreed to lay out US$1.6bn – more than US$300m of it in cash – to acquire Overture.

By John Kennedy