November 18, 2002 8:13 AM PST

Overture, Google win Yahoo berths

Yahoo Japan on Monday said it has signed nonexclusive deals with rivals Google and Overture Services to begin displaying advertising linked to keywords in searches on its site.

The deals mean a draw for now in what some had seen as a key showdown between the two search companies as they seek to expand outside the United States. Yahoo Japan, which reaches nearly 78 percent of the Web population in that country, is considered an important market for both.

The Google deal will bring advertising to Yahoo Japan from Google's Adwords Select service, which launched in Japan in July, according to the company. The agreement expands an existing deal under which Google provides Web-wide search results for the company. Terms of the deal were not disclosed.

Overture said it will begin to syndicate its pay-for-performance advertising links through Yahoo Japan beginning in December in a 18-month deal. Financial terms were not disclosed.

The deals come as Web sites turn to pay-for-performance advertising in search engines as one of the few bright spots in the online advertising market. Sites typically license such advertising from a third-party search providers and split the revenue, which is generated only when a Web surfer clicks on a link.

Overture currently dominates this market, with revenue of $172.7 million in the most recent quarter thanks in large part to partnerships with Yahoo and Microsoft's MSN. Google is seeking to catch up with its own pay-for-performance search advertising product, and has wooed away a number of customers including America Online and EarthLink.

The race has heated up as the companies attempt to expand beyond the United States. Google recently introduced its ad-buying program in the United Kingdom, France, Spain, Italy, Germany and Japan.

Overture has operations in Germany, the United Kingdom and France, among other places. Overture's Japanese subsidiary, Overture K.K., signed a multiyear agreement with Infoseek Japan K.K., which will carry commercial listings from Overture when it launches in Japan early next year.

The competition has already drawn at least one lawsuit, in which Overture earlier this year charged Google with patent infringement. The suit came after Google revamped its Adwords product to offer customers the chance to bid for keywords, a feature Overture says it pioneered.

 

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