GoTo Going Strong

Pay-for-performance search provider GoTo.com is still striking distribution deals, despite the worsening climate for online ad spending.

The Pasadena, Calif.-based company, which creates the technology for Web publishers to run paid-placement search engines on their sites, announced Wednesday that it has renewed a one-year agreement with Microsoft and inked a new two-year contract with NBCi.

The deal with Microsoft will continue to allow advertisers’ paid listings to show up in search terms on Microsoft Internet Explorer, while NBCi will join GoTo’s list of distributors for the first time. Both Microsoft and NBCi will receive an undisclosed cut of the amount advertisers pay when a Web surfer clicks on their search term.

Naturally, it’s excellent news for GoTo. Internet Explorer is the Web’s most popular browser, commanding more than an 85 percent market share, according to WebSideStory. And Jupiter Media Metrix reports that NBC Internet sites received a total of about 15.4 million unique visitors during February.

“We are delighted to be able to renew our agreement with Microsoft,” said John Gentry, senior vice president and general manager for GoTo’s affiliate business group. “Microsoft’s Internet Explorer users will continue to benefit from our highly relevant results, and our advertisers will continue to receive the high-quality traffic that Microsoft provides.”

“We also believe our advertisers will benefit from the additional quality and volume of traffic to their Web sites from NBCi’s millions of users,” Gentry added. “NBCi is one of the Internet’s leading portals, and this relationship is an important addition to our pay-for-performance network.”

The wins continue GoTo’s string of successes in attracting and retaining publishers’ interest in its cost-per-click keyword advertising proposition — a pricing structure that stands in start contrast to the Web’s dominant CPM-based model. Other affiliated sites include America Online, Terra Lycos and AltaVista.

“We want to provide our members and users with the most relevant search experience possible,” said Goody Seif, senior manager of business development, NBCi. “GoTo allows us to do this while enabling us to monetize search effectively.”

It’s not just good news for GoTo, but for its approximately 40,000 advertisers, who benefit from a wider distribution for their messaging.

That GoTo has managed to only increase its advertising base — up from 37,000 in December, and 21,000 at the end of 1999 — despite raising the minimum fees to buy a keyword, is another sign that the firm is one of the healthier players in an otherwise severely troubled market for Internet advertising plays.

Last month, the company also said its first quarter revenues would beat previously given guidance, and it would report a smaller-than-expected loss.

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