Google Deposes Overture on AOL Europe

Google scored a big win today when it deposed rival Overture to provide keyword-targeted advertising in AOL Europe’s search results through its AdWords program. Financial terms of the multi-year deal were not announced.

“By expanding AOL’s relationship with Google, AOL Europe provides our members in the UK, France and Germany with useful information about products and services relevant to their searches, and ensures that we are continuing to provide a vehicle for advertisers to reach a highly desirable audience in a compelling and effective way,” said Philip Rowley, president of AOL Europe.

Google currently provides algorithmic Web search results for AOL search products in Europe. Under the new expanded alliance with Google, the 6.3 million users of AOL services in the UK, France and Germany will now also get targeted advertising from Google beginning November 1.

An official Overture statement asserts that it was Overture, a division of Yahoo, that walked away from the table on the AOL Europe deal. The company adds that it expects the distribution loss will have little impact. “Overture engages in distribution partnerships that make strategic and financial sense for our business,” the company’s statement reads. “In the case of AOL Europe, these criteria could not be met. And while Overture aggressively pursues distribution agreements we are absolutely willing to forego those that do not meet these performance thresholds.”

Overture won the AOL Europe business in January 2002, and renewed with a multi-year deal in February 2003. Google displaced Overture in U.S.-based AOL Search in May 2002, and renewed with a multi-year deal in October 2003. Overture was acquired by Yahoo in July 2003.

Since Google and AOL were already working closely, it was not surprising that the two would expand their relationship, according to Charlene Li, principal analyst at Forrester Research.

“The AOL Europe deal completes Google’s overall relationship with AOL — and allows advertisers to buy across the entire AOL network if they so desire. In many ways, this was expected as the Overture contract came to an end,” Li said.

Google and Overture’s battle for online real estate has left them relatively even in the U.S., with Google AdSense ads on AOL and Google’s own search results, and Overture on Yahoo and MSN. This win may give Google an edge in international distribution, though Overture still has relationships with Yahoo, MSN, Wanadoo and Lycos Europe.

While Google has the momentum of the IPO and desktop search launch, Li noted out that Overture is holding its own and continues to attract advertisers. She pointed to Overture extending and expanding contracts with top content sites like, and as examples.

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