Overture reports 1stQ 2003 revenue

[Mike_Mackin]

Overture reported first quarter 2003 revenue of $224.7 million, up 57 percent from revenue of $142.8 million in the first quarter of 2002. The rise in revenue was due to substantial increases in paid introductions and average price per paid introduction.
...
Expressed as a percentage of revenue, traffic acquisition costs (TAC) were 64 percent in the first quarter of 2003, compared to 54 percent in the first quarter of 2002. Fourth quarter 2002 TAC was 62 percent.

[Chicago]

Mike-

Thanks.

Isn't it amazing that popular sentiment among WW and PPC program users in general is largely negative towards Overture (i am not one of them), yet their revenues continue to grow at a very very healthy pace.

In my opionion, Overture is exceeding at capturing broad appeal for their services while its consumer base is becoming more savvy, in addition to riding the wave of recent press, and an over-all positive regards towards PPC search engine ROI.

When it was reported that Google was expecting to generate 775MM in revenue this year, people were amazed. One only has to look at Overture to see how realistic that acutally is.

It is also worth noting that looking at revenues is one thing but take a look at Overtures (NASDQ:OVER) earnings per share. We are not only talking about a company that generates revenue, but a highly profitable company.

We will see what happens with the Yahoo! and MSN contracts, and the new AltaVista property, but at present OVER is a shinging star in the new Internet arena, regardless of current valuation, and regardless of the fragility their partner contracts. Good management is capable of seeing this through. The question is do they have it. Time will tell...if they are not swallowed up first.

[TomWaits]

Well, they might get swallowed sooner than anyone imagined. Stock's down -25% today alone. The Applied Semantics/Google hook-up can't be helping.

[Chicago]

Yea, Tom. I think this says a lot: "Overture is taking on the enormous task of launching new customer services, integrating two acquisitions, and accelerating its international launch. While we believe management will be successful there is substantial execution risk," Terry said in a research note."

I wonder what MSFT thinks and I also wonder if this actually concerns G on the heels of recent aquistions and transitions.

Relevant Note: "When Ask Jeeves reported results earlier this week, the search company said it saw a cost-per-click decline from its deal with distribution partner Google. Ask Jeeves management also provided a new outlook that wasn't as upbeat as investors had hoped."

[Chris_R]

[moneycentral.msn.com...]

The revenue climb is pretty impressive, but profits are going to get worse. At least that is how I see it.

Overture is a trick and always has been. They succeed by tricking people into using a "search engine" which isn't one. Or providing results on top of other people's searches.

I doubt that their revenues will continue to increase the rate they have been - and wouldn't be suprised if they peak next quarter or the one after that. Their revenue is down quarter for quarter for the second quarter in a row.

"Overture's traffic acquisition costs -- or the percentage of revenues generated from searches that it pays to its partners -- also increased to 64 percent in the first quarter, compared with 62 percent in the prior quarter and 54 percent a year earlier."

Heavy hitters such as microsoft are not going to allow PPC forever for the cut overture takes. Overture's results have been impressive though - I remember when someone from Altavista picked on them and the PPC model. Hehe.

They have done a great job so far, but they need to do something soon - otherwise they are going to lose their healthy margin.