Yahoo's local Overture aims to threaten Google, LookSmart

IT and e-commerce managers should keep an especially close eye on what their marketing departments are up to over the next six months, as horse-trading in the commercial Internet search-and-query space intensifies with US paid-for search listing vendor Overture setting up shop in Australia.

Overture, on the hunt for deals with Australian portals and content partners, to challenge local incumbents Google and LookSmart, was acquired by Yahoo for $US1.63 billion in July - only five months after Overture had also snapped up ailing search provider AltaVista for $US140million.

The move by Overture into the Australian market is a clear sign that online marketing has re-emerged in the minds of the advertising community after some years banished to the outer following the dotcom crash. It also signals that IT managers will again have to contend with traffic-driven dreams of increased profitability.

This time, we are told, it will all be different.

Paid-for result listings differ from traditional algorithmic search results as they are based on how much a business is willing to pay for the placement of a result and the traffic it generates. Such listings have found much favour among US enterprises trying to leverage e-commerce in the B2C and B2B space as users are supposedly 'pre-qualified' shoppers, much along the same lines as how the Yellow Pages started out - so the argument goes.

"The theory is that if you have the money to buy your way to the top, you have a product or service to offer. There is a pure economic logic to it," says Overture's vice president of corporate communications James Olsen, arguing that 88 per cent of online purchases came after a buyer conducted a search.

In the case of search-driven marketing or e-commerce campaigns, enterprises should ensure that they are tooled up to handle any traffic spikes through their customer-facing portals - although search vendors and analysts say that the paid-for listings and traffic can be turned on and off like a tap - unlike other traffic.

Jupiter Media analyst Niki Scevak says that while SME businesses have a good grasp of the traffic they attract, larger enterprises must deploy some form of Web analytics to best extract value.

"Large players don't really have a grasp of traffic or the users they are attracting. It's a matter of taking a step back and looking at what you want to achieve. What is very important is understanding what a visitor does when they visit your site, and the quality of the visitor," Scevak says.

Niether Olsen or Overture's MD in Australia, Mel Bohse will comment on exactly what the local commercial relationship with Yahoo will be; however, Olsen concedes that it is "logical" that Overture's new owner would see fit to send business its way rather than to a direct competitor - in this case LookSmart, feeding into Google, NineMSN and a few others.

Traffic. Can't live with it, can't live without it.

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