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Technology Stocks : Ask Jeeves,Inc-(Nasdaq-ASKJ)
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To: rrufff who wrote (461)5/1/2002 8:52:57 PM
From: StockDung  Read Replies (1) of 838
 
FOOL WATCH->AOL Overthrows Overture

Where's the crescendo in the overture? Shares of search engine specialist Overture (Nasdaq: OVER) created investor cacophony and fell 33% today as it was passed over by AOL Time Warner (NYSE: AOL). America Online instead will be handing over the reins for its stateside search functions to Google. It's a trying chapter in what was one of the few feel-good dot-com stories.

Overture proved to be a profitable visionary when it started out as GoTo.com. At a time when Internet content providers were pricing out ads by volume, GoTo rolled out performance-based paid listings. Advertisers would bid on search keywords and the site would list them based on who would pay more for the potential click-through. While skeptics questioned the ethics of paid listings, GoTo was transparent in letting everyone know how much each company was paying for the click. GoTo was never the biggest, but it was the profitable standout.

Now that Google has introduced its performance-based AdWords Select service -- with Overture weighing the legal ramifications of the copycat move -- America Online found a tempting alternative for sponsored search links. It's still a shock to the system. Last week, Yahoo! (Nasdaq: YHOO) extended its agreement for performance-based text ads with Overture despite relying on Google's traditional search technology. With Overture producing solid first-quarter results and now upping its second-quarter profit guidance, investors figured that Google and Overture could live together in harmony.

Apparently not. The search for peace appears fleeting now -- but you can always bid for it on either Google or Overture.

Discussion Board of the Day: AOL Time Warner

What does AOL stand to gain in the move to Google? If sharing the playing field was good enough for Yahoo!, why didn't it work for America Online? All this and more -- in the AOL Time Warner Discussion Board. Only on Fool.com.
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