Saturday, December 17, 2005

Google in AOL exclusive talks

It appears that Google may be on the verge of purchasing a 5% stake in AOL.

It seems that the new google is morphing into another beast. The best comments I found on this are the following,

Simple really. Google keeps AOL from Microsoft.

Google is used by AOL Search right now. Just the amount of traffic and ad revenue from that results in like $400 million per year in Google's coffers and is 10% of their traffic.

Without AOL, it deals a decent blow to Google, especially if it were Microsoft who takes it.

I'm sure this deal will result in a tighter integration between Google and AOL services. Perhaps AIM will be opened up for real to any client, especially GTalk. Perhaps Gmail (or at least its interface) will replace AOL Mail.

The main thing though is that Google is paying $1 billion, but will easily recoup that due to the $400+ million a year in revenue it gets from AOL to begin with. This deal is all about preventing Microsoft from expanding in the search area.


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