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Wednesday, August 13, 2003

T-Online Bombshell Shows the Portal Wars Rage On Globally

CNET's Stefanie Olsen reports that T-Online, Germany's leading Internet Service Provider and largest web property, has abruptly ended its sponsored listings contract with Overture Services, opting to sign a long-term agreement with Google for search and sponsored listings instead.

My first reaction to this announcement was to wonder whether the change was prompted by the fact that FAST Search, which currently powers web index listings for T-Online, is no longer perceived to be "European" since its acquisition by Pasadena-based Overture.

But the real story is Yahoo's takeover of Overture (and thus FAST Search as well). T-Online makes no bones about it. "We see Yahoo as one of our main competitors in several fields, so we've drawn on our change-of-control clause to terminate the contract," says a spokesman.

This type of situation is likely to continue to crop up in Europe, where strong indigenous ISP's and portals like T-Online and Wanadoo are in a tight race for market share against "global" (read: US) portals MSN, Yahoo, and AOL.

Much has been made of the fact that Google is losing contracts because it's seen as a competitor to some of the companies that it wants to partner with. But now that Yahoo controls Google's main competition, the same logic applies... perhaps even more so, since Yahoo competes in a number of channels whereas Google (in spite of its influence) is still, at the end of the day, a search engine.

Posted by Andrew Goodman




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