• by Masha Geller , October 7, 2003

As Overture stockholders finalized the $1.6 billion acquisition of the search provider by mega portal Yahoo! yesterday, the primary competitors of the two companies were not about to be left out of the limelight.

AOL and Google on Tuesday morning announced an expanded multi-year alliance for AOL Search. The two companies have been working together since May 2002 when AOL picked Google over Overture for its AdWords paid listings program.

Under the new agreement, users of America Online's brands will have increased access to Google's wide index of documents, through Google's search technology. In addition, the companies have extended their marketing agreement, enabling Google to continue providing AOL and CompuServe members and users of AOL.COM and Netscape its targeted paid search listings product, which offers a selection of listings ranked by relevancy and other factors, from Google's rapidly growing base of advertisers, now more than 150,000 worldwide. As part of this extension, Google now provides relevant sponsored links on the business listings and directories of the AOL Yellow Pages.

As previously announced, Google is also available within the search areas of the AOL service in the United Kingdom, France, Germany, Netherlands, Brazil, Mexico, Argentina, Japan, Australia and Canada. In addition, Google provides relevant sponsored links within the search areas of the AOL service in Japan and Canada.

AOL is a major player in search, facilitating 19 percent of U.S. searches in August, which puts the portal in third place behind Google (31.5 precent share) and Yahoo! (26 percent share), according to comScore's qSearch.

AOL Search is available from a number of convenient entry points on the AOL service, including the AOL Client toolbar, the Welcome Screen, contextual links within content and programming areas, as well as from the AOL Companion, which allows members to find information online quickly when using another application.

With two out of three top portals happily aligned with search providers, the search plans of Microsoft's MSN are feeding many a rumor mill in the online advertising world. On Monday, MSN decided not to renew its paid inclusion listings distribution deal with search provider LookSmart, as "part of MSN's overhaul of its search strategy." Experts are hesitating to comment on whether MSN will go with a rival search provider or develop an in-house search solution. Currently, Microsoft uses automatically generated search listings generated by Inktomi -- now owned by Yahoo! -- as well as pay-per-click listings supplied by Overture - a relationship that will most likely end after the contract expires next year.

Microsoft made up roughly two-thirds of LookSmart 's listing revenue and "No one at LookSmart could have worked any harder to renew this agreement," Jason Kellerman, LookSmart's chief executive, said in a conference call on Monday. "And I will say we were surprised by the decision."

Last week, LookSmart announced a substantial enhacement to their service offering with the debut of Sponsored Listings - a new service that allows advertisers to bid for the search terms as opposed to LookSmart's existing paid inclusion model, where businesses pay fees to ensure that their Web sites are mined extensively for possible, but not guaranteed, inclusion in LookSmart's Web directory. Sponsored Listings will be distributed via LookSmart.com as well as on CNET, Road Runner and InfoSpace.