AOL & Google
Dec. 21st, 2005 11:29 amWell, it appears to be as official as it possibly can be. According to the Forbes, Google will invest $1 billion in AOL.
In the end, this deal feels like a defensive action on Google's part - they were terrified about what Microsoft could do with AOL and wanted to prevent that at all costs. Its not, immediately, evident to me what they get out of the deal that they didn't have before, with the sole exceptions of linking the Google Talk and AOL IM services and making AOL's video clip library searchable in Google Video. In return they're taking a 5% share of AOL for $1 billion, they'll be providing AOL with search technology (I presume this means that members can search AOL premium content using Google), allowing AOL to sell graphical ads on their system (should be interesting to see how they do this - one of the big boosts of text ads are that they are just that - text ads), and AOL gets some free sponsored links (those are those large text ads that appear above most search results. As a note, they're very expensive - Genesee got quoted tens of thousands of dollars when we looked into the possibility).
Either way, this prevents MSN from merging with AOL into some super-creature that will dominate the internet and take everything over. And the deal isn't certain - the infamous Carl Icahn wants a deal with Microsoft. He also wants AOL split off from Time Warner, so he's not precisely the most liked person. With owning a 3% share comes benefits, though.
In the end, this deal feels like a defensive action on Google's part - they were terrified about what Microsoft could do with AOL and wanted to prevent that at all costs. Its not, immediately, evident to me what they get out of the deal that they didn't have before, with the sole exceptions of linking the Google Talk and AOL IM services and making AOL's video clip library searchable in Google Video. In return they're taking a 5% share of AOL for $1 billion, they'll be providing AOL with search technology (I presume this means that members can search AOL premium content using Google), allowing AOL to sell graphical ads on their system (should be interesting to see how they do this - one of the big boosts of text ads are that they are just that - text ads), and AOL gets some free sponsored links (those are those large text ads that appear above most search results. As a note, they're very expensive - Genesee got quoted tens of thousands of dollars when we looked into the possibility).
Either way, this prevents MSN from merging with AOL into some super-creature that will dominate the internet and take everything over. And the deal isn't certain - the infamous Carl Icahn wants a deal with Microsoft. He also wants AOL split off from Time Warner, so he's not precisely the most liked person. With owning a 3% share comes benefits, though.