Google's announcement last week that it was buying Applied Semantics (ASI) sent shockwaves through the financial community, causing internet analysts from Credit Suisse First Boston, Smith Barney and USB Piper Jaffray to lower their ratings on Overture.
The market also reacted harshly to the announcement, slamming Overture's stock from its opening price of $16.47 to a close of $11.49, a one-day decline of 27%. The company's shares have lost nearly 60 percent in 2003, and are trading at a 52 week low.
Search Engine Watch editor Danny Sullivan's SearchDay article about the deal went to press before Overture had a chance comment. Overture spokesperson Al Duncan has since offered reaction from the company about the deal, including a correction to one statement in the article.
"Applied Semantics is not a top ten partner," wrote Duncan in an email. "Although they were at top 10 when they served as our intermediary with New.Net but now that we have our own direct relationship with New.Net that is no longer the case."
Duncan also offered these observations on Google's acquisition of Applied Semantics, and how Overture expects the deal to affect its business:
"We do not expect this to have a material impact on revenue, if any. Applied Semantics is merely one of many technologies we have been testing as we develop our own contextual product.
"There's an inherent weakness in a pure technology approach such as Applied Semantics's product. Our product will combine technology and editorial processes (high sensitivity filters needed to eliminate bad matches -- i.e. a story about a plane crash with links to travel)."
Finally, commenting on Google's establishment of an office in southern California having strong appeal to potential job candidates, Duncan wrote:
"Overture has one of the strongest technologies team in Southern California and we have an excellent track record over the last five years of recruiting and retaining top talent. We do not anticipate the Applied Semantics acquisition to have any impact on our recruiting efforts."
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