RSSAOL, Google Ink $1 Billion Ad, IM Deal
By Nate Mook | Published December 21, 2005, 12:56 AM
As expected, Google and Time Warner announced late Tuesday a deal in which the search giant will make a $1 billion investment in AOL in return for a 5 percent stake in the company. The agreement expands a previous search partnership to include advertising and the linking up of Google and AOL's instant messaging networks.
News that Google had effectively ousted Microsoft from talks with AOL surfaced Friday. Microsoft's MSN division had been expected to replace Google as AOL's search engine and advertising provider, but months of negotiations came to a sudden halt after Google offered to include the monetary investment.
Under the new expanded alliance, AOL's Advertising.com division will sell search and banner ads across Google's Web sites, except its homepage and core search results page. Graphical ads could appear on Google's image and video search pages, the companies said.
In addition, AOL will be given access to Google's advertising technology to implement within the AOL Marketplace, which means it can sell text ads directly to advertisers rather than directing them to Google.
Google will also provide AOL a $300 million credit to purchase keyword ads on Google search properties and promote its content. AOL content will be made more accessible to Google's Web crawlers as part of the deal, but Google officials stressed the company would not give AOL precedence or access to proprietary information.
AOL's premium video offering will be added to Google Video and showcased on the search engine as well.
One interesting twist in the agreement is that AOL will open up its AIM instant messaging service to Google Talk users. Because it currently dominates the marketplace, AOL has been hesitant to connect AIM with any other network. Microsoft and Yahoo recently pledged to make their IM services interoperable.
However, little details were given on the IM proposal and the companies said interoperability would only happen "provided certain conditions are met."
"This agreement is key to fulfilling our commitment to realize the potential of AOL's very large online audience," said Time Warner CEO Dick Parsons.
"As digital technologies continue to drive industries together, the great value and opportunity inherent in Time Warner's structure and array of premier businesses becomes increasingly clear," Parsons added. "A critical piece of this strategic alliance will be our content, which we will be making more accessible to Google users."
Remarked Google CEO Eric Schmidt: "Today's agreement leverages technologies from both companies to connect Google users worldwide to a wealth of new content. We've also created a simple way for AOL Marketplace advertisers to buy and place search-related advertising across the AOL network."
With its new 5 percent stake in AOL, Google becomes the only shareholder other than Time Warner. "Time Warner will retain management control and full strategic flexibility over AOL, while Google will have certain customary minority shareholder rights, including those associated with any future sale or public offering of AOL," the companies said.
Still, Time Warner may face scrutiny over the deal from billionaire investor and shareholder Carl Icahn. In a letter published Monday, Icahn warned that if the deal with the search engine would prevent a merger or deal with another online company, the board could be "on the verge of making a disastrous decision."
Why on earth did Google buy a stake in AOL? Why would Google soil their brand with the AOL asscioation? We all know AOL is the devil incarnate..
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|I would love to hear even one example of this. One substantiated example.
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|and buy the way AOL will be nothing but a portal in the next 2 years guess google wasnt told that
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|Just another mistake from Google, going to make there downfall even harder when it comes. If the share holders figure out what the ceo's are doing with there money and that google dosent make the money everyone on wallstreet thinks. tell me how this will make them money? Everywhere I look its google this google that and when i read what google is doing yahoo or msn already did it years ago.Iam so sick of google
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|Google has too much money to blows now. Look at it's stock and PE. It's up on good news, as well as bad. The founders have been selling their shares and exercise their option like a mad man, and yet, the price of it's stock went up. With a crowds this crazy, all Google has to do is sell more shares. This is the only company I see that their price actually went up on a secondary stock offer announce and their founders selling so much shares.
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|That's because Google will own the world, and never falter or fail!
Don't you want to own a piece of the world too? :P
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|I still don't understand what Google is doing. Was this a defensive move to keep MSN and AOL from joining? Other than that, I don't see how any of these things are positive for Google.
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|The normal trend ... just think the seven sins... GREED
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|Well, I can't remember the number offhand, but Google does get a lot of its ad money from AOL, and Google Talk is not all that popular yet and it stands to gain a lot from allowing usrs to talk to AIM users.
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|I can see 3 advantages for Google. AOL has ownership and access to a lot of movie and music content that could enhance Google's future offerings. Access to AIM users and their searching activity is a major source of new income. And blocking a deal with MSN would help to keep MSN in a secondary role online, at least for now. That is a critical issue for Google and its survival on the web.
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|GAOL (pronounced GAY-O-L) Is gonna be huge.
But who's going to buy it?
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|For all you AOL bashers, AOL continues to thrive and will continue to. A 5% stake for that much money has got to mean something. Bash all you want because you might as well be spitting into the wind.
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|"AOL continues to thrive and will continue to."
As will the "... for dummies" books.
Pretty much anyone catering to the lazy and stupid will bring in loads of cash and be insanely popular.
And hey, thanks for the permission. :)
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|Um dude? where have you been? AOL has been getting itself into alot of trouble HENCE the reason this deal is going on...It's more so a way to "save" AOL.
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|If AOL sticks around for a couple years Google will probably make all that money back.
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|The problem I see with this is that Google has made concessions for a lousy 5%. Sure they'll see continued ad sales for a maintained 10-15%. But they had to use graphical/video ads now, which they said they never wanted to do. Microsoft refused to bend, they set the demands and you take it or leave it.
Meanwhile, AOL stays alive to fight another day, and correct me if I'm wrong (by contract details), and possibly still allow merger talks with Yahoo or Microsoft.
I can see it, although I hope I'm off-base... Google has 5%, Yahoo gets 10%, and Microsoft takes the rest. The winner? AOL because of the huge investments by others.
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|Nothing like throwing your weight around...
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|And they have plenty of it sitting around waiting to be thrown.
But AOL?
Ech...why? The next Google Desktop Suite going to be released and branded by AOL?
I just cannot fathom why "Don't Be Evil" is joining "Internet for Dummies."
For the most part, Google is seen as being innovative and AOL is seen as being ... the "For Dummies" ISP. It doesn't make sense...
Unless they want, "Don't be Evil for Dummies." Which doesn't make much sense, either.
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|You may actually be on to something... what better target for your ads than gullible idiots?
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|Meh....
Christ, that'd be awesome. Get all the advertisers to focus on AOL and leave the rest of us alone?
I could *definately* live with that.
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|Google Online!! With their new AD Slogan! Don't be Evil for dummies! ahhahahahahahahahahaa
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|Ok...atleast Google beat Microsoft to the mistake! I would rather see google go down beacuse of AOL than Microsoft.
Init funny tho? Watching Google and Microsoft is like watching too brothers besting each other. One brother gets a Lexus, the other brother gets a Mercedes. One brother gets a Citizen Watch, the other brother gets a Rolex. One dates a Playboy, the other gets a Super Model. It's funny! Because we all know this is how it looks!
Two Brothers! Who Best each other at everything!!
Google Gets GoogleEarth
M$ gets LiveEarth
M$ does MSN Messenger
Google Does Googletalk
It's true! all of it! M$ the Big Brother and Google the Little brother haha
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|The fight between Good and Evil is never-ending.
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|Hmm, but more and more I wonder which is Good and which is Evil. I find it amusing that strong privacy advocates are ignoring Google's intention of cataloging the entire Internet, and that Internet advertising increases dramatically no matter how much people hate it and complain.
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|I've never been a big privacy advocate. Never really seen the need for it. If google wants to know what I search for, where I browse, and hell, who I email and what we chat about, I could really not care less.
Other than the fatc that they'd be wasting amajor amount of time actually looking at any of that data, there's nothing really there that I'd be concerned about anyone getting a hold of.
And, since I'm going to be inundated with ads anyway, at least they are somewhat less annoying than most and related to my interests.
Let them catalog it.
*shrug*
Who cares?
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|Lol I know neither of them are "good" So it's more like, Evil and eviler lol
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|I don't. I wouldn't want my conversations going to the US government, but I don't really care if Google has them.
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|The idea of a good or evil corporation amuses me. Corporations exist for one purpose... making money. The people running them can have good or evil intentions, but the function of a business is to make as much profit as possible. Once a company moves into public ownership, its purpose is set. That's why self-policing in the business world doesn't work. It is the essence of business to compete and to win, so Google's move seems logical to me.
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|O well the consumer is going to pay the price for this one. First GoogleTalk is crap it works 1/2 the time at best. Aim is starting to become this way now.
I will now make MSN Messenger, and msnsearch the default messenger and search engine on all of my customers machines. Good Bye AOL. Good Bye Google. It was nice knowing you when you were a good company about 2 years ago.
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|hah, not even employees at microsoft like the msn search engine. I use Yahoo's search all the time now, and the few times I've double checked things with google, I've been sorely disappointed.
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|I use google search, and Gaim...though I much prefer Trillian. Miranda IM doesn't work due to missing DLL's.
You should really consider Gaim, Miranda, or Trillian. Trillian is a very sweet program despite its startup speed, and Gaim doesn't have a startup speed.
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|I frankly think Carl Icahn is an idiot if he thinks he can flash his money and demand things like denying the merger of these two companies. I guess Icahn doesn't like Google. Well, he's just a total idiot in my opinion.
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|Yeah, because look what happened when shareholders warned against the original Time Warner-AOL merger... or for comparison, look at HP-Compaq. Ignoring shareholders is a really bad idea... unless you want your stocks to go down... the only thing saving this, so far, is that Google has got insane amounts of funding. Oh and BTW, they are not merging... Google is investing. There is a huge difference.
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|Rather have Google + AOL than AOL + MS. MS has lots of cash, but Google is the only major competitor to MS on the web end. It's good to have two companies directly compete, and in this case Google software is usually of a higher quality than AOL or MS software.
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|"Today's agreement leverages technologies from both companies to connect Google users worldwide to a wealth of new content."
"Content" is just a mis-spelling of "Ads"...the keys are just so damn close...
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|Exactly... lol
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|And in another year or 2....GOL (Google OnLine, for those who are slow).
The Premier free all in one client offering media playback capabilities, chatting, communites, browsing, everything AOL had to offer, and more....etc.
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|Google getting mixed up with sleazes like AOL is a mistake of Microsoft proportions !
The Computer Rodent
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|AIM from GTalk? Hell yes b****es.
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|No, you'll just see AIM use more Google Ads.
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|So... basically AIM now will use text ads, and Google will use picture ads...
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