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Yahoo! Inc has decided to renew its contract with Overture Services Inc for three years, Overture announced yesterday. The decision dashes speculation that Yahoo was poised to give its advertising search business to Google Inc, which is already a key partner, or build its own customer service in-house.

"Since its inception, the Yahoo! Sponsor Matches program has shown strong performance and experienced click-through rates considerably higher than the industry average," Overture said in a statement. Terms were not disclosed.

Overture gets about 40% of its revenue from its portal partners, which display paid search engine listings aggregated by Overture from 60,000 advertisers.

Google provides a similar service, as well as providing a regular search engine to portals including Yahoo.

Yesterday the company reported a net income for the first quarter 2001 of $29.3m, compared to $20.8m in the fourth quarter and $6.7m loss a year ago, on revenue of $142.8m compared to $101.2m in the fourth quarter and $51.9m a year ago.

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