All ideas about Google began after I read the article “Microsoft Pushes for AOL Deal” in Wall Street Journal, before that I did not think that Google had a mind to become the number one rival of Microsoft, the technology company with a $150 billion market value.
The article is about AOL’s strategic partnership choice. According to the article (Wall Street Journal, Dec. 12, Article: Microsoft Pushes AOL Deal, by Robert A. Guth and Peter Grant) with the help of the Google search technology, AOL currently keeps about 80% of the ad revenue generated by searches conducted by its users. However, the AOL deal forged in 2002 played a major role in Google’s growth, but today Google’s commissions from selling ads on AOL are a small fraction of its revenue. On the other hand, AOL wants to offer advertisers a package of ads that includes ads on AOL’s online service and web properties such as Moviefone.com. Statistics show that AOL attracts 88 million unique visitors to its online properties, compared with 100 million at MSN and 122 million at Yahoo, according to comScore Media Metrix and so; on the other side of the coin there is Yahoo and MSN advertisement partnership, which means another strong back to back partnership in the field. In addition to this Yahoo is a must-buy for brand advertisers, which means that even if it is a small campaign for companies they have to use Yahoo, which creates a fixed income for Yahoo and brings them out to a safer position compared to their rivals.
On the technical side of these partnership possibility, it is not clear that MSN is going to able to match its infrastructure with AOL as Google can do, but I believe in that it won’t be such a big problem at all for a that large and innovative company. Opposed to this, Google wants to save its relationship with AOL, and was willing to buy stake in AOL at a $20 billion valuation, according to people close to the negotiations.
And the comments of every player in this dealing race were interesting. Time Warner’s Chairman said his company was in talk with multiple parties about partnership, Microsoft’s spokes woman declined to comment and on the other hand Google spokeswoman declined to comment, but added that “AOL is a valued partner, and they look forward to continuing to work with their partner more.” When I take into consideration all of these points they make me more anxious because I am sure that all of those spokespeople know much more about this deal. However, on the other hand these Silicon Valley neighbors are hiding something from rest of the world, as far the stock exchange markets are so vulnerable for such news, and they are acting politically and benefiting from the deal in an advertisement way as they always do.
