Overture Locks in MSN

Locking in a key customer, Overture Services will provide paid search listing to Microsoft’s MSN network in the United States and United Kingdom through June 2005. Financial terms of the contract extension were not disclosed.

The signing douses speculation that Microsoft would look elsewhere for paid search services, rather than strengthen ties with Overture, which recently became a Yahoo subsidiary.

Microsoft’s plans for MSN search have been of interest since it announced it was aggressively working on in-house search technology. Some industry-watchers’ questions were answered recently, when MSN said it would drop LookSmart from its lineup of search partners, concluding its deal in January of 2004. LookSmart has provided MSN with paid inclusion, a service in which an advertiser pays to have Web pages crawled but is not guaranteed placement.

Portions of the existing Overture contract, which include the MSN Web site and search pane, were due to expire in December, while others would have stretched another year.

But Pasadena, Calif.-based Overture, didn’t want to let time run out and aggressively sought to re-sign Microsoft which has been a customer since 1998.

“MSN is a very important customers of ours and we wanted to keep them in the network,” Overture spokeswoman Jennifer Stephens told internetnews.com.

The company’s network includes portals, ISPs and other destination sites. Overture’s listings are generated by more than 100,000 advertisers who bid for placement on keywords relevant to their business. The company competes with LookSmart and FindWhat in a rapidly consolidating market.

The deal is structured so the companies can easily expand it to additional countries, an appealing prospect for Overture, given MSN’s wide reach. The companies do have current deals in other markets, but the United States and United Kingdom are by far MSN’s largest for paid search.