"Overture paid search pays off for Yahoo"

Yahoo derives $54mil of reported income from Overture

[homegirl]

Salient points of the CNET article [news.com.com]:
- The contract with Overture expires April 2005 with option to renew until 2011.

"This dependance on Overture for profits...is an indication of...the risk it will face if it were to build (such a service) in-house, since the level of monetization, and hence profits, will fall off sharply"

- Yahoo acknowledges the risk of its Inktomi purchase, placing it in greater competition with AV and FAST (owned by Overture), yet reliant on Overture for profits.

"If we are unable to... continue to secure an arrangement with a third party provider such as Overture on terms which are acceptable to us, or we are unable to develop our own ability to provide this service, our revenue could significantly decline."

This doesn't seem to rule out a purchase of Overture (no matter point #2/1st quote above). Why continue to be so dependent? (greater vulnerability) What other 3rd party provider would they consider? Google AdWords? That would be interesting especially if they roll out Inktomi search in the next few months.

[jeremy goodrich]

Interesting article - got that one from a coworker this morning (that is where my deja vu came from...) :)