Traffick - The Business of Search Engines & Web Portals
Blog Categories (aka Tags) Archive of Traffick Articles Our Internet Marketing Consulting Services Contact the Traffickers Traffick RSS Feed

Thursday, February 06, 2003

Beginning of the End for Overture?

The announcement that many small advertisers feared came quickly today. Today I received a "personal" e-mail from Paul Schulz, Senior Vice President, Marketing at Overture announcing that the minimum bid for purchasing paid keywords is rising from 5 cents to 10 cents. That represents a 100% increase.

I read yesterday on CNET that Overture's UK division had already instituted the higher minimums. The author of the article also speculated that the move would soon happen in the U.S., too. Well, exactly one day later, that has already happened. In another article on CNET today, we learn that Overture's revenue has skyrocketed, but that their profit declined because their affiliate partners such as Yahoo are taking a larger chunk of the pie.

So what do they do? They pass the buck to the ever-screwed community of small businesses who can't afford to have a large stable of 10-cent keywords. The minimum bid increase will surely pad Overture's bottom line at our expense, but I suspect that this is also the beginning of the end for the pioneering paid search company. They will likely see increased profits in the short term, but they may be jeopardizing long-term growth by pushing the minimum bid out of the reach of thousands of loyal advertisers, who may have to compensate by weeding out all but their most relevant keywords.

This development also points even more to the eventual fate that many analysts believe Overture will face: With their distribution partners taking an ever-increasing piece of the pie, Overture becomes more and more dependent on companies that could sink it by starting their own paid search programs. Overture has no choice but to accept the demands of its partners, who are expected to take 64% of what Overture earns.

Yahoo recently hired away a key Overture exec, and it seems inevitable that the portal will develop its own paid search program, perhaps in conjunction with a revamped Inktomi, which Yahoo also recently acquired.

The writing is on the wall for Overture, and thanks to the minimum bid increase, I'm sure many disaffected advertisers couldn't care less.

Posted by Cory Kleinschmidt




View Posts by Category

 

Speaking Engagement

I am speaking at SMX West

Need Solid Advice?        

Google AdWords book


Andrew's book, Winning Results With Google AdWords, (McGraw-Hill, 2nd ed.), is still helping tens of thousands of advertisers cut through the noise and set a solid course for campaign ROI.

And for a glowing review of the pioneering 1st ed. of the book, check out this review, by none other than Google's Matt Cutts.


Posts from 2002 to 2010


07/2002
08/2002
09/2002
10/2002
11/2002
12/2002
01/2003
02/2003
03/2003
04/2003
05/2003
06/2003
07/2003
08/2003
09/2003
10/2003
11/2003
12/2003
01/2004
02/2004
03/2004
04/2004
05/2004
06/2004
07/2004
08/2004
09/2004
10/2004
11/2004
12/2004
01/2005
02/2005
03/2005
04/2005
05/2005
06/2005
07/2005
08/2005
09/2005
10/2005
11/2005
12/2005
01/2006
02/2006
03/2006
04/2006
05/2006
06/2006
07/2006
08/2006
09/2006
10/2006
11/2006
12/2006
01/2007
02/2007
03/2007
04/2007
05/2007
06/2007
07/2007
08/2007
09/2007
10/2007
11/2007
12/2007
01/2008
02/2008
03/2008
04/2008
05/2008
06/2008
07/2008
08/2008
09/2008
10/2008
11/2008
12/2008
01/2009
02/2009
03/2009
04/2009
05/2009
06/2009
07/2009
08/2009
09/2009
10/2009
11/2009
12/2009
01/2010
02/2010
03/2010
04/2010

Recent Posts


You'll Do Your Comparison Shopping on Portals, Say...

You stand on the threshold to the magical world of...

Weird Science A recent meeting with a Google ex...

Bricks Meet Clicks (Finally): Shopping Search Come...

Google's Light Touch Just scrolling down a back...

CNN gets Googled Chalk up another victory for G...

What We Need is An Anti-Spam Revolution... or at t...

Do Accountants Use Pop-Ups? It was an expensive...

"Ain't it Cool?" No... No, It Isn't I don't kno...

All's Well in Amazonia North... or Is It? A few...

 


Traffick - The Business of Search Engines & Web Portals

 


Home | Categories | Archive | About Us | Internet Marketing Consulting | Contact Us
© 1999 - 2013 Traffick.com. All Rights Reserved