Overture and MSN Extend Relationship

• Oct. 17, 2003

We were expecting this. Once MSN dropped Looksmart, we realized that Overture was going to remain MSN’s key PPC supplier. After all, there is no one else out there, other than Google AdWords, but since Google apparently snubbed Microsoft’s attempt to buy the company, I would think the two search heavyweights are not on very good speaking terms.

What this means to you, the search marketer is that you can still pay to remain at the top of the MSN search results. What else it means, however, is that Overture will remain a search results provider powerhouse until the contract is terminated which in turn means that the average bid price should continue to rise. While this doesn’t seem too bad, consider that the average bid price is now $0.40 per click. By 2005 can you imagine what it will be? To give you a hint, last year at this time the average was $0.35 per click. Therefore it’s safe to assume that the average by 2005 will be at least $0.50. I would think however it would climb to closer to $0.75 per click by then.

I say this because in 2001 the average price per click was $0.23. In two years it jumped by almost $0.20. Therefore, if we assume the same exponential growth, an average click cost of $0.75 isn’t out of the realm of possibility.

This is, of course, all speculation. There may be another PPC player out there that we aren’t considering. Perhaps Looksmart can come back to MSN with a sweeter deal? Although I don’t foresee this happening, there are other potential suppliers.

Or, perhaps Microsoft could increase their offer to Google. That would really stir things up in our world. We’d go from 3 players to 2 (Yahoo! and MSN). Both with comparable products and both with about ½ of the market.

That is a scary thought.

Rob Sullivan
Production Supervisor
Searchengineposition.com
Search Engine Positioning
specialists