Yahoo is to acquire paid search service provider Overture Services in a deal worth $1.63bn.
Overture is one of the leading commercial search providers, netting more than 88,000 advertisers in the first quarter of the year. Yahoo said that with the acquisition, it hopes to fill out its search offerings, including pay-for-performance search, and tap into Overture's client base to sell advertising and online marketplace services.
In February, Overture agreed to acquire search technology company AltaVista for $140m, and those assets are now expected to fall into Yahoo's hands as well.
Overture has been committed to bolstering its search offerings, having also recently acquired web search technology company Inktomi for $235m.
Yahoo said commercial search is one of the fastest growing segments of the internet advertising market. Citing figures from Piper Jaffray, Yahoo said that the market is expected to grow from $2bn by the end of this year to $5bn by 2006.
By bolstering its search services and technologies, Yahoo is taking on leading search provider Google.
The Overture buy is subject to custom closing conditions, including regulatory approval. If the deal goes through, Overture will be a wholly owned subsidiary of Yahoo, which will still be headed by Overture president and chief executive officer Ted Meisel.
Scarlet Pruitt writes for IDG News Service