FR1,
What you said is not exactly correct. Overture's system does not run itself...it takes a huge staff to constantly review submissions for relevancy and approve/disapprove them. If any new listing or term were valid (some of the lesser competitors allow this), Overture's listings would be of such poor quality that no one would want to use them to perform searches. For this reason, Yahoo, MSN, nor anyone else will be able to easily compete with Overture. They have been in business for years (formerly as Goto.com) and have slowly built their advertiser base and huge array of bidded terms during this time. Should Yahoo, for example, decide to discontinue their partnership with Overture this summer and launch their own program instead, it would require them to spend an enormous number of man-hours to review and approve the new listings that would pour in. Aside from this task, even with Yahoo's prominence, it would take a long time to build up to the number of advertisers that Overture has. Yet another consideration is that if Yahoo, MSN, Google, or anyone else decides to start up their own in-house system to compete, they will run afoul of Overture's patents if they mimic their business model. As if all these hindrances were not enough, it would also take a newcomer quite some time to build a reliable back-end and gain the experience to smoothly run such a bidded-term business. I have been with Overture nearly since their inception and I am probably one of the larger advertisers with the PPC model...I spend about $1,000 per day...so I think I have a fairly "insider" view of how the industry works. That has something to do with my ability to sniff out stock plays on OVER and FWHT. For example, I knew right away that the Google threat of a couple weeks ago was far overblown because I am familiar with Google's AdWords program and know that it is highly ineffective from the advertiser standpoint (with a few exceptions). If you put faith in my opinion, buy and hold Overture. I am absolutely convinced that it is the future of search monetization and is nowhere near realizing its full potential. I wouldnt be surprised to see earnings approaching $2 per share for 2002, and if this were to happen in combination with a modest P/E ratio of say 30, Overture will easily reach a share price of $60 by next year. |
