More Consolidation In The Search Market

Fast Search & Transfer acquires Overture Services' AltaVista enterprise search business.

Tony Kontzer, Contributor

June 17, 2003

2 Min Read

The search-market consolidation that's been in high gear the past several months may have crescendoed Tuesday with Fast Search & Transfer's acquisition of the AltaVista enterprise search business from Overture Services Inc. for an undisclosed price. The deal, which is the second between the two companies in less than four months, marks at least the sixth notable exchange of search technology since November, but the dust may settle after this one closes.

"This completes the unbundling of enterprise and Web search, with one notable exception, and only one: Google," says Matthew Berk, senior analyst at Jupiter Research. But Berk expects Google, which sells a line of search server appliances unlike anything other vendors offer, to continue succeeding in serving both the enterprise and Web-search markets, a fence-straddling challenge no other vendors have been able to weather. Consider that in the past seven months:

• Verity Inc. in November acquired the enterprise search assets of Inktomi Corp. for $25 million in cash

• Yahoo Inc. bought the rest of Inktomi's technology and product line in December for $235 million

• In February, Overture acquired AltaVista's combined enterprise and Web-search businesses for $140 million

• Just a week later, Overture purchased Fast's Web search for up to $100 million, including incentives tied to future revenue

• In May, Kanisa Inc., a maker of customer-service applications, snatched up Ask Jeeves Inc.'s Jeeves Solutions enterprise search business for $4.25 million

Adding Overture's 200 AltaVista enterprise customers, which include Factiva,, Citigroup, and federal government agencies, helps Fast move into a variety of key vertical markets, says John Rueter, Fast's VP of global marketing. Rueter says he expects the new customers to eventually move to Fast's technology as they need to deliver data faster and in larger quantities. But while Fast's long-term plan is to phase out the AltaVista product line and merge it with Fast's technology, "there is no immediate plan to force an end of life for AltaVista customers," Rueter says.

Berk says the deal is good for everyone involved—Overture, for which supporting enterprise search clients likely was proving a liability; Overture's customers, who will get strong support from Fast, which has retained five AltaVista employees specifically for supporting the inherited customers; and Fast, which further strengthens its enterprise search technology and "gets to prove its strength to interesting new customers."

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