Tuesday, October 19, 2004

Google wins AOL Europe's sponsored search business

AOL Europe announced this morning that Google (GOOG) will provide sponsored search results across their online properties in Europe. Google already provides natural search results for AOL Europe. They will displace Overture (owned by Yahoo! (YHOO ) ) as AOL Europe's paid search provider. Google already provides natural and paid search results for AOL in the U.S.

This is a relatively big win for Google as Overture had this contract since January 2002. Lehman Brother's analyst Douglas Anmuth estimates this will reduce Yahoo!'s net revenue about $20-30 million in 2005 and increase Google's net revenue by $12-16 million in 2005. The reason for the difference is because Google probably agreed to share a greater percentage of the paid search revenue to gain the business. Google shares about 80% of it's AdSense revenue with its partners based on Google's financial reports.

Google will report earnings after the close of the market on Thurs. Oct 21st.

Read the AOL Europe press release here.

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