Web marketing group Overture located its hub in Ireland mainly because of our skilled staff, Jaynie Studenmund, chief operations officer, tells Jamie Smyth, Technology Reporter

You can't question Ms Jaynie Studenmund's energy levels. The 48-year-old mother of two is a veteran distance runner who has competed in several marathons.

And despite her job as chief operating officer of one of the world's biggest internet marketing firms, Overture Services Inc., Ms Studenmund still competes in distance running events in the US.

But over the past 24 months as Overture embarked on a rapid expansion into overseas markets, Ms Studenmund has spent more time on aeroplanes than on the running track.

"We have a presence in the UK, Germany and France and later this year we will go into Italy, Spain, the Netherlands and Scandinavia," says Ms Studenmund, who flew into Dublin earlier this week to announce a multimillion euro investment in a European Search Services centre at the East Point Business Park.

"We also recently launched our operation in Japan and will enter the South Korean market later this month," she says.

Overture, which was formerly known as GoTo.com, develops technology for internet search engines, which it licenses to some of the best-known search portals.

Its most successful product enables companies to pay to ensure that their name and details come up as a result in certain searches. They pay a fee every time their name appears and must outbid rival firms to ensure that their name appears first.

This "pay for performance" internet model is provided to search engine partners and major internet portals such as MSN and Yahoo.

The system serves as a direct sales vehicle for firms to generate leads from Web users. The more cash an advertiser bids in an auction for a search term, the higher their listing appears in the search results. In many ways the system is the Web equivalent of the Golden Pages.

"The core of what we do is essentially paid listings and we are very proud of the fact that all of our listings are hand-edited," says Ms Studenmund. "We now have 80,000 paying advertisers."

Unlike many of its competitors in the internet marketing arena, Overture is generating free cash flow and reported net income of $73 million (€67.9 million) on revenues of $668 million in 2002. This was a major increase on the net income of $20 million and revenues of $288 million made in the previous year.

Overture's Web-based business model means that advertisers pay a fee only when a user clicks onto a Web link. This gives advertisers a very cost-effective way to target consumers and has helped Overture buck the downturn in the global advertising market, says Ms Studenmund.

"This will be our fourth consecutive year of triple-digit growth in revenues," says Ms Studenmund, who joined the firm in January 2001 following a brief stint as president and chief operating officer for the US internet bill management firm, PayMyBills.

"This business \ was about transactions too and closely related to my background in finance. It gave me experience of the internet before joining Overture," she says. "Overture may be a different world from banking but there are parallels. We have 80,000 advertisers and organise bids in real-time."

Ms Studenmund's career successes lie mainly in banking. After completing a BA in economics from Wellesley College and an MBA at Harvard Business School, she successfully climbed the executive ladder at several US banks in the 1990s including Home Savings of America, Great Western Bank and First Interstate Bank of California.

After leaving banking, Ms Studenmund joined the Los Angeles Times as a senior executive only to resign just six weeks after taking the post. In a short statement released at the time, she would only say: "This was a gut-wrenching decision in large part because I do like and respect so many people at the Los Angeles Times... But I concluded, for me personally, it was not a match."

But the fast-growing global internet marketing sector is proving much more to her tastes.

"This is a $2 billion market and it is growing," she says. "The number of paid introductions we facilitated for advertisers in 2002 rose to 2.2 billion, up from 1.4 billion in 2001."

This growth in introductions was matched by an increase in the average price per paid introduction to 31 cents in 2002, up from 20 cents in 2001. The extra revenue made by the firm is enabling its expansion in Europe.

Overture's new Dublin hub will employ about 200 customer-support and editing staff to support its growing European business.

At least a third of these positions will go to editing staff who compile the search results that Overture sells to European advertisers, says Ms Studenmund.

"Europe is critical to our business. Our UK operation is profitable already and we have told the street we will earn $1 billion in revenues this year. Europe will really dominate the international part of our business... We expect revenues worth $125 million."

The Republic is not in the next wave of European markets that Overture plans to set up. But the firm plans to sell its direct internet marketing services in the local market in the future.

Overture chose to locate its hub in Dublin because of low corporate tax rates, good international broadband connectivity and cost competitiveness. But the really key issue was the availability of skilled staff, according to Ms Studenmund.

"We need a lot of European languages to do our business and serve customers and we found that Ireland was a good place for this," she says.

"This isn't just a call centre type of operation. The craft of our business is in the quality of help and in our search results... Each is handcrafted by a highly trained person."

Overture also already locates its network servers and telecoms infrastructure to power its European operations in the Republic, making it an even more attractive location for its hub operations.

Despite being one of the fastest-growing companies in the internet sector, few regular Web users will have heard of Overture. But they probably will have heard of GoTo.com, the brand name that Overture dumped to facilitate its global expansion.

Despite fighting a series of lawsuits in the late 1990s to protect its globally recognised brand name GoTo.com, Overture eventually ditched the name in October 2001 because it couldn't expand its brand name overseas.

Considering one of Overture's biggest competitors is also one of the world's biggest and most recognisable brands, Google, is the new brand not a major weakness?

"In some ways Google and Overture have helped each other to educate the market," says Ms Studenmund, who believes Google's strong brand could cause problems for its portal partners such as AOL which have paid billions building their own brands.

Instead, Overture has not promoted its own brand and seeks to work with a network of partners rather than setting up search engines that could compete with its network partners such as Yahoo, MSN and Lycos, according to Ms Studenmund.

However, a recent acquisition spree by Overture, which has added the Web search unit of FAST and the prominent search engine Altavista to its resources, has caused some analysts to question where the firm is headed.

"We are still very committed to not becoming a destination site for searches. Rather we will distribute through portals," says Ms Studenmund. "But our goal is to extend our products range."

Overture will seek to develop algorithmic search engine technology - similar to the type that Google has developed - and other types of technology that will offer greater personalisation for searches.

New types of indexing to enable localised searches and more paid inclusion search material for advertisers is also on the agenda, says Ms Studenmund.

But perhaps the biggest threat Overture faces in the near term is the defection of its distributor partners.

A persistent rumour that MSN - one of Overture's biggest distribution partners - plans to develop its own pay-for-performance search technology is undermining the share price.

Despite persistent denials by Microsoft and Overture personnel, the rumour has caused Overture's shares to halve since the start of the year from above $30 to about $15.

Ms Studenmund and her fellow Overture executives will need all their energies to push the price back to $30.