Now this would have been a very interesting deal to be on the inside of. I can only imagine the back and forth and the stakes being raised. If what the Journal is reporting (Paid reg) is true, somehow Google has outbid/outmanuevered Microsoft. This says a lot about what Google views is important. I can say it in one word: Traffic.
From the brief article:
Time Warner Inc. has entered exclusive talks with Google Inc. over a partnership with AOL, apparently shutting out Microsoft Corp. and other suitors, according to people familiar with the situation.
The news comes following weeks of speculation that AOL would choose to drop Google, its current ad partner, in favor of a deal with Microsoft, which had worked aggressively to try to woo the foundering Time Warner unit away from the Internet search giant.
The contest illustrates how far companies are willing to go to secure a chunk of the quickly expanding market for Internet advertising….
Update: Journal report alleges $1 billion for 5%. That’s a healthy but not crazy $20 billion valuation for AOL. Reuters story.
Safe to say if this is true Google will be the search leader for the next generation as well.
Defining moment for Gates and company.
MSN should be pulling out all stops here!
Hey, didn’t a Google/AOL deal push Overture into Yahoo’s arms once? Could a MSFT/YHOO deal be next?
This is about traffic, but IMO, it is about Google’s traffic more than it is about AOLs. Google is going to do for the TWX portfolio of brands what AOL could not! IMO.
Holy premium!
Reuters reporting Google pays $1B for 5% stake in AOL.
It’s interesting. You have a company that *is* media, AOL (yes, yes, you could also say they are primarily an ISP, but given access is now a commodity their real value is what they offer inside their walled garden made up of people who tend to stay there), and a company that is *becoming* media, GOOG. As more ad money moves online and more is asked of the medium than simple paid search results (requiring it to step in to the passive brand building role that TV has historically played) an AOL/GOOG tie up makes a ton of sense. Well beyond the short term benefit of the protecting paid search revenue from their existing deal.
– Stuart