Google snags T-Online deal from Overture

Competition between search providers heats up

LONDON -- Leading Internet search provider Google indicated this week that it has no intention of ceding its place to rival Yahoo as it announced a rash of new customers for its corporate search tool. The announcement comes just days after it scored a deal with European Web access provider T-Online International, which dropped Overture Services in favor of the search giant.

T-Online terminated its contract with Overture, which Yahoo is in the process of acquiring, to sign the multiyear deal with Google on Thursday, a T-Online representative said.

The company drew on a clause that allowed it to terminate its contract early if Overture was acquired by a competitor, T-Online spokesman Mark Nierwetberg said.

"We view Yahoo as a direct competitor," Nierwetberg said. He declined to say how long the contract with Overture was for, but noted that it was "multiyear."

In a statement, an Overture spokesperson said, "We are very surprised that T-Online has decided to prematurely stop serving Overture listings."

Competition between search providers is heating up, with Yahoo making a concerted effort to solidify its place in the market through acquisitions and the adoption of new technologies.

Earlier this year Yahoo updated its search engine and in July said that it was paying $1.63 billion for Overture.

Google, meanwhile, has introduced features such as Google News and News Alerts, and a corporate search tool called the Google Search Appliance (GSA).

Google, of Mountain View, Calif., said Tuesday that it has signed up new customers such as Xerox, Nextel Communications, Procter & Gamble, and the U.S. Army for GSA, which was introduced in early 2002.

According to Nielsen//NetRatings, Google grabbed 29.5 percent of the U.S. audience in January of 2003, while Yahoo had 28.9 percent. Yahoo has been working to gain ground, saying that search is one of its top focus areas.

Yahoo's dedication to search comes as little surprise given that the Sunnyvale, Calif., company reported in May that one-fifth of its first quarter 2003 revenue came from services provided by Overture.

Representatives for Yahoo in the U.K. weren't immediately available Wednesday to comment on T-Online's decision to terminate its contract.

Copyright © 2003 IDG Communications, Inc.