The acquisition, which is expected to close in the fourth quarter, will leave Yahoo! and Google as the two remaining dominant players in the search market.
Overture is to become a wholly owned subsidiary of Yahoo! , and Overture President-CEO Ted Meisel will report to Dan Rosensweig, Yahoo!'s chief operating officer.
"Together the two companies will be able to provide the most compelling and diversified suite of integrated marketing solutions around the globe, including branding, paid placement, graphical ads, text links, multimedia and contextual advertising," Yahoo! CEO Terry Semel said in a statement.