San Francisco ? Yahoo snapped up online advertising pioneer Overture Services for about $1.6 billion on Monday, giving the Internet powerhouse a potent weapon in the competitive search-engine business.

By buying Overture, Yahoo gains control of one of its most important business partners and strikes a blow against Google and Microsoft. Google is the top search engine, and Microsoft has been pouring more resources into the online search on its MSN site.

Overture has been one of Google’s fiercest rivals, and now its ad-based search engine threatens to become more formidable by tapping into Yahoo’s greater resources.

Like Yahoo, Microsoft’s MSN service had been collecting a steady stream of profits from Overture.

Although Yahoo executives said they hoped to maintain Overture’s existing alliances with partners such as MSN, it seemed improbable that the rivals would want to subsidize each other, said Danny Sullivan, editor of the industry newsletter Search Engine Watch.

“This hurts MSN because Overture had been one of its best buddies,” Sullivan said.

Overture has played a pivotal role in Yahoo’s recent financial revival, accounting for roughly 20 percent of Yahoo’s revenue of $604 million during the first half of this year.

Conceived by dot-com entrepreneur Bill Gross in 1997, Overture developed a search engine that sorts its results based on how much advertisers are willing to pay to be ranked under specific words; the more they pay, the better placement they get on Web searches on sites such as Yahoo.

Ridiculed just a few years ago, the so-called “pay-for-performance” concept has turned into a gold mine. Pay-for-performance search is expected to generated $2 billion in revenue this year.

Overture’s shares rose $2.54 to close at $24.05 Monday on the Nasdaq Stock Market after the cash-and-stock deal was announced. Yahoo’s shares gained 1 cent to close at $32.20.