• by April 25, 2002

During an earnings conference call Thursday afternoon, the top provider of paid search listings Overture Services Inc. reported big increases in first-quarter net income and revenue and announced a new three-year deal with one of its major partners, Yahoo!

Overture CEO Ted Meisel began the call by announcing the Yahoo extension, and describing the ongoing AOL negotiations as "the elephant in the room." Meisel said he had no new information on the ongoing negotiations to win a new contract from AOL Time Warner Inc. – a contract that was originally set to expire on March 31 but now has been extended twice to May 1 to allow more time for negotiations.

Overture reported first-quarter net income of $29.3 million on sales of $142.8 million. The earnings and revenue figures substantially surpassed Wall Street's consensus expectations. The results also surpassed a forecast that Overture issued in February.

Under the Yahoo! agreement, Overture will continue to provide Yahoo! with its editorially reviewed Pay-For-Performance search results from its growing base of 60,000 advertisers. This agreement is a renewal of a relationship that began in November 2001. The terms of the agreement were not disclosed.

Terry Semel, Chairman and CEO of Yahoo! Inc., said, "Search and paid listings are key growth areas for Yahoo! and with the strong success of Sponsor Matches since its launch in November, we are looking forward to providing even more comprehensive and enhanced search opportunities for advertisers and consumers."

Yahoo! Sponsor Matches is an enhanced placement program that gives websites increased visibility in Yahoo!'s search results, distinguished in clearly demarcated sections. Since its inception, the Yahoo! Sponsor Matches program has shown strong performance and experienced click-through rates considerably higher than the industry average.