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Overture Profit Rises 88% as Revenue More Than Doubles

October 23, 2002|David Colker | Times Staff Writer

Overture Services Inc., which provides advertisers with favored placement on Internet search engines, said Tuesday that its third-quarter net income rose 88% despite high-profile customer defections over the last several months.

The Pasadena company, whose service is used in search engines for Yahoo Inc.'s flagship site and Microsoft Corp.'s MSN, earned $16.9 million, or 28 cents a share, compared with $8.97 million, or 15 cents, for the same period a year ago. Sales rose to $172.7 million in the three months ended Sept. 30 from $72.5 million last year.

Chief Executive Ted Meisel said during a conference call with analysts that Overture continues to find new customers, even during this rough climate for online advertising.

"We grew our advertiser count by 6,000 to 73,000," said Meisel. He said he expected Overture "to be on a high growth path for the next several years," especially in its foreign operations.

But the company has taken hits over the last several months from chief rival Google Inc., which won accounts from AOL Time Warner Inc.'s America Online, EarthLink Inc. and Ask Jeeves Inc., all former clients of Overture.

Overture, formerly known as GoTo.com, earns a fee whenever a user of a search engine on a partner site clicks through to an advertiser who paid for placement. Advertisers who pay the most are listed first in search results.

Overture shares fell 66 cents on Tuesday to $29.84 on Nasdaq before the results were announced, then fell further in after-hours trading.

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