Yahoo! adopts paid search listings

14 Nov 2001 16:24

The portal has teamed up with Overture to boost revenue by adding sponsored links to its directory

Yahoo! said on Tuesday that it has partnered with for-fee search service Overture to add sponsored links to its directory, in a move to bolster revenue as advertising sales wane.

The Internet portal said it plans to integrate Overture's paid listings, or "sponsor matches," with its directory pages by Thursday. The service lets advertisers bid for placement in query results rather than rely on natural listings or editorial recommendations. The portal will feature Overture's top five for-fee listings in a clearly marked section separate from the results retrieved by Google, Yahoo!'s search partner.

Terms of the deal were not disclosed.

Until now, Yahoo! has largely held back as many major search services adopted paid-listing models after the online ad market soured. In the past 16 months, online portals including America Online and the Microsoft Network began weaving in for-fee listings to diversify revenue and cash in on some of the burgeoning success of Overture, formerly GoTo.com.

Overture, which recently announced reaching operating profitability, has become the poster child for commercialised search, drawing high demand from direct marketers looking to connect with consumers. With nearly 50,000 advertisers, Overture has wowed the search industry at a time when advertising dollars are scarce.

Earlier this year, Yahoo! tested the waters of sponsored links by selling placement for select advertisers at the top of commercial category pages. By partnering with Overture, Yahoo!'s search results will also return paid listings.

Yahoo!'s full endorsement of paid listings comes as the company struggles to broaden its sources of income. In search, the company recently increased its fees for Web sites seeking reviews from Yahoo! editors, jumping from $199 to $299. It has also introduced new subscription services such as paid personal ads and an email service for businesses.

"Yahoo! Sponsor Matches is consistent with our strategy to leverage our core strengths in order to build growing and diverse revenues," Yahoo! chief executive Terry Semel said in a statement. "Millions of Internet searches conducted on Yahoo! each day are commercial in nature, giving businesses tremendous opportunity to market their products and services through enhanced placement in our search results."

The companies signed an agreement until April 2002, when Yahoo! will either begin to sell its own directory placements or continue the relationship with Overture.

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