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interactive local media

Interactive Local Media White Paper

Yahoo! Buys Overture
Greg Sterling , 7/15/2003

Issue: Deal Consolidates Yahoo!'s Position as Internet Ad Leader

News: In a move that may have sweeping implications for the world of online advertising, Yahoo! issued a statement this morning that it was buying Overture Services Inc. in a transaction worth approximately US$1.63 billion.

If the deal closes at this price, Yahoo! will be paying about 88 percent of Overture's highest valuation in the last 12 months. Each outstanding common share of Overture will apparently receive 0.6108 share of Yahoo! common stock and US$4.75 in cash. That means Yahoo! will be paying something less than US$300 million in cash for the deal.

By acquiring Overture, a provider of pay-for-performance keyword advertising, Yahoo! gets Overture's technology infrastructure, including search engines AltaVista and FAST, its 88,000 clients and its extensive distribution network. The deal enables Yahoo! to consolidate its position as one of the top two sites for online search and as the provider of the most comprehensive suite of advertising options and services available. It also sets the stage for some very interesting scenarios and potential further consolidation, both in search and Internet Yellow Pages (IYP).

Copyright � 2005 The Kelsey Group. All Rights Reserved.
This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under Federal law. The Kelsey Group disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.

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