Overture's Wins
Interesting little note buried unobtrusively in this month's Overture advertiser newsletter. It seems that Overture has ousted Google as the provider of pay-per-click results for Sympatico, Canada's biggest portal & ISP. As part of the deal, Sympatico is also dropping Google for algorithmic search because Overture was able to offer them this as well -- remember, they acquired FAST Search's web search index as well as AltaVista.
This is a fairly significant development as it does show that Overture's acquisitions of search engine properties were rooted in real disadvantages it faced when going head-to-head against Google in negotiations where the latter could offer both search and pay-per-click.
Possibly more importantly, it proves the point that portals are continuing to play the search and paid search providers off against one another, using their control of traffic as leverage. Various reasons may be given for dropping a paid search provider and signing a new one -- surely we'll be able to suss a few pretexts out of Google Canada and/or Sympatico management at some point -- but the underlying economic reality is that the portals are moving to take a bigger share of the pie away from third-party vendors.
In Google's case, as long as the searching is being done on Google, they're happy if you call them a "portal" if that means they get 100% of the ad revenue. MSN, we know, is developing solutions in-house. And Yahoo! acquired Overture so it could take 100% control of its paid search revenue (along with revenues emanating from its forthcoming Inktomi-powered index, which it also owns).
The only major portal that isn't touting its own search stuff (but rather, proudly touting "powered by Google" in TV ads) is AOL (if I'm still allowed to call them that).
Did someone say "portals matter"?
Posted by Andrew Goodman
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