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Technology Stocks : Overture (OVER) formerly (GOTO)
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To: brk who wrote (172)7/19/2002 4:08:37 PM
From: Ryan Bartholomew  Read Replies (4) of 429
 
No, Ask Jeeves is not popular any longer. In fact, it accounted for just about 2% of Overture's revenues. Not a big deal by any means. The more important issue is the big picture... is Google a formidable competitor to Overture that will be able to continue to win contracts away from them? As I have said all along, being on the front lines of this industry I can tell you that Google does not convert nearly as well as Overture. Advertisers will never pay as much per clickthrough, and this will enable Overture to maintain their edge. Why then has Google won a few contracts from them? Because they are offering better terms for the partners. Google is offering bigger revenue percentages and perhaps equity to beat Overture in negotiations. The key is that this is only a SHORT TERM effect... AOL, Ask Jeeves, Earthlink, and any others that foolishly partner with Google will eventually go back to Overture because the economic reality is that the sweet deals Google gives up now will not make up for their inferior average bids in the future.

I predicted that Overture would run up to the upper 20's by the end of next week, and while that still may happen, it looks unlikely now given the market environment. Not many stocks are up over the past month. Overture has held up well, and although this latest reaction to Ask Jeeves is another over-reaction, I dont think it will rally until investors see proof that I am correct about Google being a blip, not a long term problem.
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