May 13, 2004 11:45 AM PDT

CitySearch teams with Overture

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CitySearch said Thursday that it has signed a deal with Yahoo's Overture Services to run the latter's paid ads in its local search listings for select cities and categories.

Overture specializes in selling advertising links that accompany search results on sites such as Yahoo and MSN. Under the deal, Overture ads will appear in categories where CitySearch has available ad inventory, such as home services, professional services and medical specialists. Financial terms of the deal were not disclosed.

The move comes little more than a year after CitySearch, which is owned by InterActiveCorp, introduced its own advertising service to compete with Overture on a local level. The company unveiled a pay-per-click ad service, called Local Pay for Performance, which reflected the business model of Overture's national ad network. CitySearch sought to match up advertisers with consumers searching for local dining, entertainment and shopping services. Advertisers pay for the ads only when people click through.

Under terms of the deal, Overture ads will appear as "sponsored results" when a customer uses CitySearch for conducting a local search.

Local search has been the rage of late. Last month, Google launched what it called Google Local, a service that helps Web surfers find local businesses by typing in a search term and a city name.

The market for local advertising online is small, but analysts are predicting it will eventually take a larger chunk of the $12 billion overall market for local ads in the United States.

CitySearch had been talking with Google about a partnership.


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