Yahoo goes OVER

Yahoo bought Overture for $1.6 billion or so.

I’ve always thought that OVER was underpowered and overpriced. Their margins are plummeting. Their revenue is too dependent on a few large customers (especially Yahoo). And any idiot could build their own paid search business if push came to shove.

But Overture is probably worth more to Yahoo than to anyone else. Yahoo will save a lot of money over the next couple of years by not having to pay commissions to Overture. Add to that the savings of not building a paid search business and the strategic advantage of keeping Overture from MSN and Google.

In a sense it was inevitable.

Leave a Reply

Your email address will not be published.