December 4, 2002 9:43 AM PST

Overture strikes up in Japan

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Overture Services, a commercial search provider, on Wednesday launched operations in Japan, rounding out its overseas expansion.

The Pasadena, Calif.-based company, which originally planned to enter business in Asia early next year, debuts in Japan with several high-profile partnerships already in place. The company, which licenses search results that are paid for by advertisers, has signed deals with Yahoo Japan and MSN, among others, through its Japanese subsidiary.

Overture's official launch in Japan lifts the flag on conquering a new market in a battle with rival Google and on mining revenue from an untapped business landscape.

"We believe we have built a strong foundation and market-leading business in Japan, which will serve as our initial beachhead for the larger Asia Pacific Rim," Johannes Larcher, general manager of Overture International, said at a press conference in Tokyo.

Japan is viewed as a ripe new market for search engine marketing because it has a large, active Internet population--second only to the United States--and a growing e-commerce industry, with prime buyers of commercial search listings. It has also become a key battleground in the paid-search business as Overture and Google set about to dominate new markets overseas.

Overture has become profitable by inviting marketers to bid to have search terms bring up their Web site in results; they pay only when Web surfers click on their link. Google, a top Web search service, introduced a similar bid-for-placement advertising program in 2002 and began licensing its commercial results to portals such as America Online and EarthLink, both former Overture customers.

Overture and Google have pinpointed international expansion as key to continued growth. Google recently introduced its ad-buying program in the United Kingdom, France, Spain, Italy, Germany and Japan.

For its part, Overture operates in Germany, the United Kingdom and France, among other places. It opened offices in Tokyo this year and started signing deals with dominant Japanese Internet companies, including Infoseek Japan. It has also agreed to test its service with Microsoft's MSN in Japan for the first few months of 2003.

Last month, Yahoo Japan signed nonexclusive deals with Google and Overture to begin displaying advertising linked to keywords in searches on its site. Yahoo Japan, which reaches nearly 78 percent of the Web population in that country, is considered an important market for both.

Upon its opening in Asia, Overture said it will reach an estimated 87 percent of Japanese Internet users, making it the largest commercial search network in the country.

 

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