(Direct Newsline) Internet portal Yahoo has signed a definitive agreement to acquire Overture Services in a stock and cash deal worth $1.6 billion, Overture said this morning. Pasadena, CA-based Overture is one of the largest Internet search companies.
“Together, the two companies will be able to provide the most compelling and diversified suite of integrated marketing solutions around the globe, including branding, paid placement, graphical ads, text links, multimedia, and contextual advertising,” Yahoo CEO Terry Semel said in a statement.
Overture would become a wholly owned subsidiary of Yahoo, which would have access to Overture 88,000 advertisers. Overture would remain in Pasadena. The deal is expected to close in the fourth quarter.
The news came as a surprise to the search industry, which was circulating rumors that Microsoft/MSN planned to buy Overture.
Under the terms of the deal, Overture shareholders will receive .61 shares of Yahoo stock and $4.75 in cash—adding up to a $1.63 billion sale price, according to an Overture statement.
The deal will make Yahoo a search giant. Overture already owns AltaVista and FastWeb. And Yahoo bought Inktomi last year for $235 million. If the purchase goes through, Sunnyvale, CA-based Yahoo will own three of the five biggest search engines, each of which has its own technology.