Due to the development of new search-technologies and the recent spate of mergers and acquisitions in the search engine industry, the sponsored or paid, advertising sector is undergoing a realignment.

From 1999 to mid 2002, Overture was the dominant player, providing a simple and relatively inexpensive means of placing a website-listing on the front page of most major search engines. By selling access to their Top-3 listings under any given keyword phrase, Overture established a massive distribution network for their paid-listings. The Top3 sites at Overture, (based on the amount an advertiser is willing to spend per click-through), would appear above traditional search listings on most major search engines, often displayed as Sponsored Sites, Recommended Sites, or Preferred Sites. When a user clicked on a listing, Overture and its search partners would split the fees charged to the advertiser. This was a good arrangement for Overture and the several search partners it worked with. The distribution of Overture listings was a very powerful advertising tool guaranteeing first page listings for a fee that was set by the advertisers themselves. Before Google became the truly dominant search engine in 2002, Overture listings were a great way to get clients early exposure while waiting for search engine spiders to find and rank optimized websites. When Google became the predominant search site, the power of Overture's distribution network was heavily diluted. The advent of Google's AdWords program has offered advertisers another option and has also helped to dilute Overture's original market. Overture's recent purchase by Yahoo, (seen by several other Internet businesses as a major rival), has sent some of its largest partners to Google.

In August, one of the largest European ISPs, T-Online abruptly cancelled its deal with Overture, citing the pending purchase by Yahoo and switched paid-advertising providers to Google starting in early October. Yahoo operates an ISP service and offers a host of E-commerce options to clients. With the acquisition of Overture's business, Yahoo has access to all of Overture's business information, much to the discomfort of former partners such as T-Online and apparently, Terra-Lycos.

Another Internet giant that moved over to Google after the Yahoo purchase of Overture was Lycos. Lycos is now suing Overture for breaching their paid-search contract by allowing itself to be purchased by Yahoo. From September 2001 to the end of September 2003, Overture supplied Lycos with sponsored advertising on a pay-per-click basis. Lycos has since signed an agreement with Google for the supply of context-based website-advertising through Google Adwords. The suit claims that Overture will have shared confidential information about the Lycos operation and business strategy with Yahoo, seen by Lycos as a rival. The suit further claims that Overture did not seek consent from Lycos before entering into purchase negotiations with Yahoo in violation of a clause in their agreement. Lycos is seeking an additional $800,000 it says it is owed by Overture under their former agreement.

Overture has lost some ground to Google in the past few months. Google AdWords adds another dimension to the paid-listing format with box-style ads that appear to the right of search results on Google and also appear on websites that have signed up for Google's AdSense program. AdSense offers webmasters the opportunity to have AdWords advertising appear on their sites based on the topic or context of their websites. For instance, a site featuring information about water-filters might display an Adwords advertisement for air-filter systems. Google recently announced it had broken the 150,000 advertiser mark, less than a year after introducing AdWords. Conversely, Overture states it carries just under 100,000 advertisers though its Content Match program. Overture's main client for listings is MSN which just extended its deal with Overture to June of 2005. It continues to serve paid advertising to Yahoo, AltaVista, and AlltheWeb. Google serves paid-content to Ask Jeeves, Teoma, T-Online, AOL, Netscape, Earthlink, and several major newspapers and media outlets.