GoTo.com and AOL.

Laura Dunphy

GoTo.com has penned a several-year deal with America Online Inc. to provide search features to three AOL entities.

The Pasadena-based company will pay $50 million to have its search listings included within the AOL service, on the AOL.com Web site, and in the search feature on the AOL subsidiary, Netscape.

"We're effectively making a guarantee on the revenue that will result from these deals. We're pretty comfortable with it," said Ted Meisel, president and chief executive of GoTo.com. "We're comfortable enough that we were able to move our date of profitability up by a quarter as a result of the deal -- fourth quarter (of 2001) for whole company, and third quarter for the search business."

GoTo.com's search engine differs from most others in that companies wanting to be listed pay a negotiated amount to GoTo.com every time a user clicks through to their site. The more a company pays, the higher the company appears on the list of results when a user performs a search.

GoTo.com currently offers two products to other Web sites: It provides a standalone search engine to sites with only one search function, and it provides a smaller selection of listings to large portals that are using multiple search engines. GoTo.com will provide the latter, a selection of listings, to AOL.

"(GoTo's results) will be labeled distinctly, which we think is the right way to do it," Meisel explained.

That setup is appropriate because different search engines arrive at their results in different ways, he said. Breaking out the results from different search engines recognizes those differences, so users can see a variety of listings in focused groups instead of one jumbled listing of results.

Though this is the company's first deal with behemoth AOL, GoTo.com previously had deals with Netscape and Compuserve, both now AOL subsidiaries.