August 1st, 2003

PPC Paid search listings on the Internet will likely grow more expensive in the next few years as the vehicle helps drive Web advertising, Overture Services Chief Executive Ted Meisel has said.

"Currently, Overture's average click charge is 40 cents ... and that has grown substantially over the last two years," Meisel said on Wednesday at an Internet advertising conference sponsored by Jupiter Research in New York. "When we look at the return that advertisers are getting, we certainly don't see anything that would get in the way of that moving up towards 50 cents."

Paid search allows advertisers to pay for listings under keywords related to their product or brand, with prime rankings on a user's search commanding higher prices.

Jupiter Research estimates that paid search will be a key contributor to a modest recovery in online advertising, which has languished since the dot-com bust. It forecasts paid search will grow 50 percent to $1.6 billion in 2003. Some industry watchers expect the market to grow to $6 billion to $8 billion in the next five years.

Pasadena, California-based Overture, which sells ad space linked to Web search results, is locked in an intense rivalry with No. 1 Internet search provider Google In April, Overture bought two search engines to broaden its reach, a move many in the industry saw as a direct challenge to Google. Earlier this month, Overture announced it was being acquired by Internet media company Yahoo Inc. in a cash and stock deal valued at around $1.6 billion.

Meisel said the acquisition "ultimately will be good (for the market) because we'll be able to accelerate our product development efforts as a result." On Monday, Overture said it had closed one of its first major search agreements -- a deal to provide its full line of services to the Internet arm of newspaper publisher Knight Ridder for one year.

Meisel said the company had close to 80 more deals under discussion. "So there's a lot in the pipeline, there's a lot of publisher interest in search and related advertising content, targeted advertising," Meisel told Reuters. "I think you can expect to see more deals like that over the coming months."

Meisel said that Overture would also launch a more sophisticated product for the less-tested market of local advertisers in the fourth quarter.

Source: UK News-Yahoo.com

        

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