BANGALORE, INDIA - Yahoo Inc. may continue with the AltaVista Web site (www.altavista.com) after it completes its acquisition of Overture Services Inc., and may use some of AltaVista's search technologies on its own portal sites, according to an executive of Sunnyvale, California-based Yahoo. AltaVista, a provider of Web search services and technology, is currently a business of Overture.
"We believe that the AltaVista brand is still very strong, and has come to attract a particular type of user, and it is entirely possible that we may keep the AltaVista site to serve a particular niche of users," Phu Hoang, Yahoo's senior vice president for engineering, told IDG News Service. "I think that there may be opportunity for us to try (on AltaVista) new search features and new capabilities that are a little bit on the edge, that we are not yet ready to show up in the mainstream."
Hoang was in Bangalore Thursday for the formal inauguration of Yahoo's software development center in India.
Yahoo announced in July that it signed a definitive agreement to acquire Overture of Pasadena, California, which offers paid-search listings, with syndication through search engines on Web portals including Yahoo and Microsoft Corp's MSN.com. Overture sells its listings by auctioning off search terms to the highest bidder. "We saw that search from a business standpoint was very much a commodity business, and could not bring in much profits," said Hoang. "Overture was the company that changed that landscape by making search the new hot thing, because they found a way to allow someone like us to drive a lot of revenue from search. This came from their ability to have a marketplace where small merchants can come in and bid for a search term. It became clear to us that this was a very sustainable business in search." The proposed acquisition of Overture will give Yahoo control over a key component of Yahoo's business strategy in search, said Hoang.
Yahoo expects to expand Overture's pay-for-performance search faster and more cost effectively into its vertical properties, such as shopping, travel, and yellow pages, and integrate contextual advertising throughout Yahoo's network, including properties such as in sports, real estate and autos. Yahoo also plans to sell a number of its own products and services like Yahoo Store and Yahoo Web Hosting to Overture's over 80,000 customers, according to Hoang. "If you look at Overture's base of advertisers, these people are small merchants and small business people, and we have a number of small business tools and services that we can sell to them," said Hoang.
Yahoo's proposed acquisition may however make some of Overture's distribution partners uncomfortable, according to analysts. European Web access provider, T-Online International AG, for instance dropped Overture in favor of Google Inc. of Mountain View, California, citing a clause that allowed it to terminate the contract early if Overture was acquired by a competitor. MSN.com is another key customer of Overture.
"We would love to keep MSN, and we aim to keep them, but when we did the deal with Overture, we did the calculation that we would do the deal even if the contract with MSN does not continue," Hoang said. Yahoo will keep Overture as a separate company after the acquisition, because Overture provide its service to many companies, including Yahoo's competitors, added Hoang.