Overture Shares Drop on Revised Outlook

NEW YORK Shares of Overture were trading on the Nasdaq at $15.23, down 12 percent midday Tuesday, a day after the Web site search provider said it plans to purchase the Internet business unit of Fast Search & Transfer and revised its earnings outlook.

The acquisition, which is expected to close in April upon customary approvals, calls for Overture to pay out $70 million in cash, as well as up to $30 million over three years in performance-based cash incentives. Under the terms of the agreement, Overture will pick up the Oslo, Norway company’s Web search technology assets, related intellectual property rights, personnel and data centers in London and Sacramento, Calif.

The announcement came a week after Overture agreed to buy Altavista, a Palo Alto, Calif.-based Internet search company that is majority owned by CMGI, for $140 million.

As a result of the impending acquisitions, Overture adjusted its financial projections for 2003. The Pasadena, Calif., company said that it expects 2003 earnings per share to be 20-21 cents, excluding potential, one-time acquisition related costs. The purchases are expected to be accretive to earnings by mid-2004 and the company believes that, at a minimum, they will be neutral to earnings for full-year 2004.

The 52-week high of Overture’s stock (OVER) is $35.70 and the 52-week low is $16.26.