Overture Buys AltaVista for $140 MillionPaid search leader Overture Services Inc. signed a definitive agreement yesterday to purchase search engine AltaVista for $140 million.
The agreement calls for Overture to pay $80 million in stock and $60 million in cash. CMGI owns the majority of AltaVista, Palo Alto, CA. Overture, Pasadena, CA, reported having $250 million in cash at the end of 2002. The deal is expected to close in April.
With AltaVista's algorithmic search technology, Overture will be able to go after complete search deals, instead of just offering paid listings. After entering the paid-search market nearly a year ago, Google quickly became the leader and lured away Overture partners EarthLink, Ask Jeeves and AOL. Overture said it will license the technology to its customers, including Yahoo and MSN. It also will use AltaVista to test new search services and marketing products for its advertisers.
The announcement follows Yahoo's recent acquisition of Inktomi, whose technology rivals that of AltaVista's.
"Adding AltaVista is an important step forward in expanding our capacity and commitment to search," Overture CEO Ted Meisel said during a conference call.
Overture said it expects AltaVista's management team to stay with the company.