T-Online ordered to revive Overture deal

Overture Services on Tuesday confirmed that it has obtained a court injunction to restore its contract with T-Online, one of Europe's largest Web access providers.

A German court ordered Deutsche Telekom, parent company of T-Online, to continue providing the commercial search provider's results on its T-Online Web sites. Two weeks ago, T-Online dropped Overture as its exclusive paid search provider and replaced it with Google. T-Online, which operates services in Germany, Austria, Spain, France and Switzerland, said the move was in reaction to Yahoo's proposed $1.7 billion acquisition of Overture. T-Online considers Yahoo to be a competitor in Europe.

"The injunction will serve to reinstate Overture's search listings and remove those of Google, which were activated on the T-Online Web site on August 7, 2003," said Jim Olson, an Overture spokesman. "T-Online was in serious breach of its contract."

T-Online claimed it could terminate its deal with Overture if the latter is acquired by a rival. Overture claimed the swap breached the companies' original contract, slated to expire in 2004.

The German court at least temporarily agreed with Overture's take on the issue.

The injunction is just one skirmish in an ongoing war between Overture and Google over the highly lucrative business of paid search. Both companies allow advertisers to bid for placement when consumers search for specific key words. Whenever consumers click on an advertiser's search results, the advertiser pays Overture and Google a per-click fee.

Overture in particular has helped partners such as Yahoo and Microsoft's MSN generate millions in cash every quarter. Yahoo has disclosed that 20 percent of its revenue last quarter--about $64 million--was generated from hosting Overture links on its site.

A T-Online representative could not be reached for comment. A Google representative declined to comment.

CNET News.com's Stefanie Olsen contributed to this report.