Yahoo may continue with the AltaVista website after it completes its acquisition of Overture Services, and may use some of AltaVista's search technologies on its own portal sites.
"We believe that the AltaVista brand is still very strong, and has come to attract a particular type of user, and it is entirely possible that we may keep the AltaVista site to serve a particular niche of users," said Yahoo senior vice president for engineering Phu Hoang.
"I think that there may be opportunity for us to try new search features and new capabilities that are a little bit on the edge, that we are not yet ready to show up in the mainstream."
Yahoo announced in July that it had signed a definitive agreement to acquire Overture, which offers paid-search listings, with syndication through search engines on web portals including Yahoo and Microsoft's MSN.com.
Overture sells its listings by auctioning off search terms to the highest bidder. "We saw that search from a business standpoint was very much a commodity business, and could not bring in much profits," said Hoang.
"Overture was the company that changed that landscape by making search the new hot thing, because they found a way to allow someone like us to drive a lot of revenue from search. This came from their ability to have a marketplace where small merchants can come in and bid for a search term. It became clear to us that this was a very sustainable business in search."
The proposed acquisition of Overture will give Yahoo control over a key component of Yahoo's business strategy in search, said Hoang.
Yahoo expects to expand Overture's pay-for-performance search faster and more cost effectively into its vertical properties, such as shopping, travel, and yellow pages, and integrate contextual advertising throughout Yahoo's network, including areas such as sports, property and cars. Yahoo will also sell a number of its own products and services, such as like Yahoo Store and Yahoo Web Hosting to Overture's 80,000-plus customers.
"If you look at Overture's base of advertisers, these people are small merchants and small business people, and we have a number of small business tools and services that we can sell to them," said Hoang.
Yahoo's proposed acquisition may, however, make some of Overture's distribution partners uncomfortable, analysts warned. European Web access provider, T-Online International, dropped Overture in favour of Google, citing a clause that allowed it to terminate the contract early if Overture was acquired by a competitor. MSN.com is another key customer of Overture.
"We would love to keep MSN, and we aim to keep them, but when we did the deal with Overture, we did the calculation that we would do the deal even if the contract with MSN does not continue," Hoang said.
Yahoo will keep Overture as a separate company after the acquisition, because Overture provides its service to many companies, including Yahoo's competitors.
AltaVista was acquired by Overture in April. In the same month, Overture acquired the web search unit of Oslo-based Fast Search & Transfer (FAST), a developer of enterprise search and real-time filtering technologies.
After the acquisition of Overture, these search technologies and services will become the property of Yahoo which also has its own search engine. Yahoo acquired Inktomi, a web search technology provider, last December.
FAST has, traditionally, been very strong in the basic science of crawling and indexing, AltaVista has been pretty strong in different needs and features of search, such as multimedia search and clustering search, while Inktomi has been good focusing on relevance.
"They are all really good nice pieces for us to put together an entire framework of providing the best search experience to the user," Hoang added.
John Ribeiro writes for IDG News Service