Yahoo! Search Marketing is a keyword-based "Pay per click" or "Sponsored search" Internet advertising service provided by Yahoo!.
Yahoo began offering this service after acquiring Overture Services, Inc. (formerly Goto.com). Goto.com was an Idealab spin off and was the first company to successfully provide a pay-for-placement search service following previous attempts that were not well received.
In May 1999, Goto.com filed a patent application titled "System and method for influencing a position on a search result list generated by a computer network search engine". The patent was granted as US patent 6269361 in July 2001. A related patent has also been granted in Australia and other patent applications remain pending.
Prior to its acquisition by Yahoo!, Overture initiated infringement proceedings under this patent against FindWhat.com in January 2002 and Google in April 2002.
The lawsuit against Google related to its AdWord service. In February 2002, Google introduced a service called AdWords Select that allowed marketers to bid for higher placement in marked sections - a tactic that had some similarities to Overture's search-listing auctions.
Following Yahoo!'s acquisition of Overture, the lawsuit was settled with Google agreeing to issue 2.7 million shares of common stock to Yahoo! in exchange for a perpetual license.
In April 2003, Overture announced a three-year partnership with Gator Corporation, (now Claria Corporation) an adware company. Under the partnership, Gator's software monitored a web-user's activity on web sites and search engines (even sites such as Google that are not affiliated with Overture) and grabbed search keywords. These keywords were submitted to the Overture search engine. As a result, advertisers who paid for listings in Overture found their products advertised through Gator's Search Scout software, even if they wanted nothing to do with Gator. Overture faced a great deal of criticism for entering into this partnership.
When Yahoo acquired Overture, the Claria software impaired the operation of Yahoo's services. For example, when a user with a Claria application installed used Yahoo Search, they received a standard set of Yahoo results with sponsored listings at the top supplied by Overture. The user would then receive a full-screen pop-under window from Search Scout. Since Search Scout uses Overture's paid listings as well, Claria's window has the exact same listings as the Yahoo search results.
Subsequently, Yahoo! came out with the Yahoo! Toolbar, which allows users to remove adware and spyware from their system. The toolbar affected the operation of Claria's software and may have put stress on the relationship between the two companies. Claria's website, claria.com, does not list Yahoo! as a partner and a March 2006 press release states that they are exiting the adware business.
