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AOL-Google Deal Closer

Posted by hs on December 19, 2005

(Updating a previous post)

NYTimes is reporting in AOL’s Choice of Google Leaves Microsoft as the Outsider that Time Warner would formally announce tomorrow Google buying 5% stake in AOL.

There’s an interesting parallel that NYT draws out between circa 1997 Netscape-IE battles and Google-MSN battles of today, with the slight twist: Microsoft is on the other side. Although MS was believed to have almost clinched the deal about 3 months back, this is what seems to have turned the tables: Microsoft’s refusal to take AOL’s Internet-access business, and its decision not to contribute its e-mail, messenger and, most important, its new Live.com portal to the venture.

AOL and Microsoft also passed on a chance to create a third big portal to compete against Yahoo & Google.

Google, on the other hand, provides AOL with, what is, arguably the best Internet search technology currently. It would also help AOL in sending traffic to AOL’s free, advertising-supported Web sites and give AOL the ability to offer its existing advertisers search ads for the first time and will allow AOL’s sales force to sell display advertising on Google’s extensive network.
Yahoo might have to look for other ventures for its search service business – MSN might switch away from Yahoo once its own technology matures, and that might be as early as next year.

Update: NYTimes Business report – AOL and Google Formalize Partnership to Include Shared Selling of Ads
Keywords: Google, AOL, Deal, Stake, MSN, Yahoo, Netscape, IE, Search, Advertising

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