After re-reading the two Overture conference call articles and Overture's press release about the acquisition, and given the MSN-Inktomi deal announced after this thread started, here's my revised take on the situation.
Overture's President and CEO Ted Meisel stressed in a conference call, "We do not believe we are creating a competitor for our partners," however the top reason given for the acquisition is 'to syndicate AltaVista’s advanced algorithmic search technology.'
The February 18 Overture press release also gives as first motivation, "The acquisition will enable Overture to offer a significantly enhanced Web search solution to portals, Internet service providers (ISPs) and other destination sites."
The new long-term MSN-Overture deal suggests that MSN agreed with Meisel that Overture by buying Alta Vista was not creating a competitor for Overture's partners.
Nevertheless, search was the top motivation given for the purchase.
That means, if we trust their public statements, that Overture is planning to use Alta Vista to "offer a significantly enhanced Web search solution to portals, Internet service providers (ISPs) and other destination sites" that does not create "a competitor for our partners."
What could that be? I'm thinking tonight that it means creating a turnkey search product (including PPC, PFI and free search) for second-tier portals (non-"competitors"), and any ISP or destination site. Sort of a one-stop shop to compete with the all-in-one Google/Adwords for smaller traffic generating sites.
The second motivation was given in their press release as, "Additionally, AltaVista's Web site will allow Overture to test and refine new products and services in a live setting."
Combine that statement with Meisel's February 6 statement (from the link in Zoron's post) that Overture had "underinvested" in future growth.
Overture could use Alta Vista to test small new products or, perhaps, even major rewrites of it's PPC engine. Already - to me - Overture's backend seems antiquated compared to AdWords.
Overture has "underinvested" in product development and has fallen behind, in my opinion. Indeed, the next generation of products could push the current Overture towards obvious obsolesence.
But they couldn't make a major switch within their current system, Overture is just too vast to make large changes. A new product would need massive live testing and refinement, first.
Anyway, you can expect Alta Vista to be the testing ground for new Overture products.
There may be international reasons as well. International growth is a top priority of Overture according to the February 6 conference call. However, since Overture did not mentioned that as a justification for the Alta Vista purchase (according to the press accounts above or the press release), I'm going to set it aside for now.