Overture signs deal with Gator

April 4, 2003

Overture Services has signed a three-year deal with Gator to display its sponsored search listings on pages that pop under those of rival and partner Web sites.

The pay-for-performance search company has been testing a partnership with Gator's online advertising and information network (GAIN) for several months. In the last week, the company committed to a lengthy deal to distribute sponsored listings from its advertising network onto Gator's new paid search product, Search Scout.

Financial terms of the deal were not disclosed. Like previous products from Gator, Search Scout allows advertisers to reach members of the Gator network when they are visiting competitors' sites--a feature that has already drawn lawsuits in the context of banner and pop-up advertising. Gator's Search Scout, launched in December, triggers a pop-under window when a Gator customer searches on a site such as Google or Yahoo. The window lists search results tied to keywords purchased through competing search services.

The deal turns up the heat on a rivalry between Google and Overture--two of the dominant forces in one of the Web's hottest marketing sectors. In particular, it gives Overture access to visitors of its chief competitor and it helps the company broaden its own advertising search network onto a new platform.

"This is a great opportunity to get more clicks to more advertisers," said Paul Schulz, Overture's senior vice president of marketing. "Gator's been innovative in understanding a terrific opportunity in search--they are a strong player in the adware market, and it's an attractive channel for search."

Overture and Google, the two top companies in the marketplace, get paid when people click on an advertiser's listing in related search results. That money is shared with distribution partners, such as Yahoo or Microsoft's MSN, that display those search results. Because the formula has proven lucrative for all parties involved, competition to expand search advertising into new arenas is fast and fierce, with Google and Overture announcing new partnerships almost weekly. On Thursday, Google signed a deal with Amazon.com to provide Web and commercial search results to the online shopping site.

Gator's new service adds a twist to the search market by adding another layer to the desktop to display sponsored search results. In addition, for Search Scout, Gator draws on search results from Overture rivals Terra Lycos, FindWhat.com and eSpotting. The company said it may add other partners in the future.

"We're excited to expand our relationship with Overture and begin providing their results to Search Scout's millions of users," said Scott Eagle, chief marketing officer of Gator. "Our decision to make Overture a premier partner was based on their market-leading product quality as well as their ability to help us maximize search monetization."

Redwood City, Calif.-based Gator delivers pop-up and pop-under ads to millions of people who agree to receive ads in exchange for use of Gator's online wallet software or other popular applications such as Kazaa or DivX compression technology, which bundle the GAIN network into their own download.

Gator says it has about 35 million active users on the GAIN network and Gator wallet software, with about 600 advertisers targeting messages to those people, often at times when they're visiting rival sites.

Gator's practices and those of its advertisers have drawn much controversy in Internet publishing and e-commerce circles, sparking numerous lawsuits, including those from shipping company United Parcel Service, news agency The New York Times and direct marketer L.L. Bean. In February, it settled its suit with publishers, including The Washington Post, The New York Times and Dow Jones. Terms of the agreement were made strictly confidential.

Search experts have criticized Gator's Search Scout for its potential to alienate Overture's established advertisers, as well as those of other search providers. Because advertisers of Overture and other services expect to reach people contextually through search--for instance, when they are in a particular mindset--they could be disappointed to realize that they are delivering pop-under ads that people often open well after the fact.

Gator and Overture say that the numbers prove otherwise, however. Despite the indirect communication with consumers via a pop-under ad, "clicks"--the number of times people respond to the listings--on the Search Scout page are "at or above a network average" on Overture, which is to say in the double digits, according to Schulz. Gator's Eagle said that click-throughs can get as high as between 11 percent and 19 percent for specific keywords, including financial services or personals.

"What I like about it is that pop-unders are unobtrusive--they don't interrupt users when they're on a particular site, and you're really only clicking on those results if you haven't found what you're looking for," Schulz said.

Story by Stefanie Olsen
Staff Writer, CNET News.com

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