Slashdot Mirror


Google Wants a Piece of AOL?

minuszero writes "BBC News is reporting that "Google is said to be in talks with media group Time Warner about a stake in its internet service provider, AOL." Talks are reprted to be in the early stages still, but one possibility is a "three-way joint venture to house AOL's content offering, with Time Warner retaining a controlling interest." Current estimates for this sort of move are around $5bn. The article also claims that Microsoft has also shown interest in tieing up MSN and AOL services." Clearly Google's interest in AOL is their huge CD distribution system, widely regarded as the most advanced in the world as demonstrated by my mailbox.

30 of 223 comments (clear)

  1. Take bets now M$ vs. G.... by AlltheCoolNamesGone · · Score: 5, Insightful

    There can be only one!

    Seriously in the long run it doesn't matter who (if any of the two) wins, the fact that there is competition now will hopefully mean better products, innovation and hopefully an overall better deal for the consumer.

    More on topic I don't think it matters who buys AOL I don't think either company is going to do anything else than cross plug there own products....

    --
    M$ it's whats for diner!!!!!
    1. Re:Take bets now M$ vs. G.... by databyss · · Score: 3, Insightful

      Usually better products come about due to competition for market, not competition to consolidate the players.

      10 Companies competing to get a larger share of 300 million users will result in better products (in theory anyways).

      2 Companies competiting to reduce the field of companies from 5 to 4 will result in a smaller field of companies and will have a negative result on product quality and innovation (in theory again).

      --
      Hmmm witty sig or funny sig? Maybe elitest techy sig!
    2. Re:Take bets now M$ vs. G.... by Shakrai · · Score: 3, Insightful

      the fact that there is competition now will hopefully mean better products, innovation and hopefully an overall better deal for the consumer.

      Call me cynical but I highly doubt Microsoft will innovate anything. They will try to buy up another solution close to what Google has (in any arena), tweak it a bit and leverage their desktop position to try and steal market share away from Google.

      I grow weary of hearing about how competition is so great for the consumer. Sometimes it is. Other times the companies involved just rig the market. And still other times competition might be good for the consumer on the face of it but the companies drive themselves into the ground in the process (the airline industry) and the customers/taxpayers get to pick up the pieces.

      The free market is not the solution to everything.

      --
      I want peace on earth and goodwill toward man.
      We are the United States Government! We don't do that sort of thing.
    3. Re:Take bets now M$ vs. G.... by JordanH · · Score: 2, Insightful

      Maybe Google is only in talks to drive M$ crazy and make them pay too much. We know that Balmer personally hates Google. That might be expected to make M$ behave irrationally with regard to their negotiations with TW.

    4. Re:Take bets now M$ vs. G.... by JasonKChapman · · Score: 2, Insightful
      And still other times competition might be good for the consumer on the face of it but the companies drive themselves into the ground in the process (the airline industry) and the customers/taxpayers get to pick up the pieces.
      So? Even in that instance competition was good for the consumer. Those who bought cheap airline tickets got their tickets and used them. You can't blame competition for short-sighted management running the company at a loss. Nor can you blame it for vote-buying, favor-currying politicians that insist the taxpayers should pay for management's mistake. That's like trying to blame Apple because a kid got killed for his iPod.
      --
      Sorry, I'm a writer. That makes you raw material.
    5. Re:Take bets now M$ vs. G.... by The+Lynxpro · · Score: 2, Insightful

      "Maybe Google is only in talks to drive M$ crazy and make them pay too much. We know that Balmer personally hates Google. That might be expected to make M$ behave irrationally with regard to their negotiations with TW."

      I don't believe that. How does it benefit Google for Microsoft to drop $5 billion on a partnership with TimeWarner that sees them acquiring AOL Instant Messenger, ICQ, and kicks Google off the AOL Search Page? $5 billion is chump change for Microsoft. It does not financially impact them...in fact, their stock would probably climb on news of such a combo.

      On the other hand, I can see Microsoft trying to manipulate this to get Google to burn through money in acquiring a stake in AOL. However, Google is trying to do the partnership along with Comcast to lighten their financial burden/responsibility.

      It is in Google's best interest to acquire this stake.

      --
      "Right now, somewhere in this world, Scott Baio is plowing a woman he doesn't love," - Peter Griffin, *Family Guy*
    6. Re:Take bets now M$ vs. G.... by quanticle · · Score: 2, Insightful

      Other times the companies involved just rig the market.


      If the market is being rigged, a true competitive state does not exist, and the government has to step in (e.g. with anti-trust laws) and restore competition. Competition is nearly always good for the consumer. However, the free market does not always encourage competition.

      --
      We all know what to do, but we don't know how to get re-elected once we have done it
  2. Google's interest...? by Anonymous Coward · · Score: 5, Insightful

    Surely their interest would be in Microsoft not acquiring AOL and slashing Google's revenue stream by replacing the "AOL" (read Google) search service with their own.

  3. Re:Do No Evil by CSHARP123 · · Score: 2, Insightful

    How will google reconcile any partnership with Time Warner with their policy of doing no evil?
    Google is a publicly traded company. They by law has to maximize the profits for their shareholders. There is a difference between being ethical and being legal. When they say DO NO EVIL it may mean do legal things. They have never said we follow some ethics as dicatated by some religion or some community.

  4. The Death of Google? by Gilatrout · · Score: 5, Insightful

    AOL is like the kiss of death. Time Warner found this out the hard way. About the only thing going for it is it's IM tool and that is not enough of a reason to buy this.

    The death of Google will not come entirely because of somehting like AOL, but rather from a lack of direction. To me it seems as if Google is going 10,000 directions at once and eventually this will cause it to fracture. They got a bucket of cash from the IPO and it seems like they can't find a way to get rid of it fast enough.

    Soon enough that bucket will be empty and then Google is going to have a huge basket of toys that they won't know what to do with because the only thing they have in common with one another is that they are owned by Google.

    1. Re:The Death of Google? by TheRaven64 · · Score: 2, Insightful
      To me it seems as if Google is going 10,000 directions at once

      This is a process known as research. You put a little investment into a lot of possible approaches, and then turn those that look promising into real products (development - the other half of R&D).

      This concept may be unfamiliar to you - it's not very popular with large companies these days.

      --
      I am TheRaven on Soylent News
    2. Re:The Death of Google? by BewireNomali · · Score: 4, Insightful

      wall street also likes to run up stocks because large wall street partners are deeply invested in companies. Companies like Legg Mason manipulate the market, usually because they have the most to gain. For example, a Legg Mason guy on Bloomberg television said recently, when asked about how he could justify Google's stock price given earnings, he said something to the effect of, "it's their culture. they have guys analyzing the food they eat." The journalist responds, "well, how does this translate into revenue?" and this guy responds, "imagine if that precision is applied to products." What? What does that mean?

      Then a google search shows that Legg Mason owns like 15% of google, actually one of the largest pieces of the pie. They've been in since day one.

      The point of which is to say, Wall Street will put its money in places where market psychology will assure quick returns. Satellite radio is an example. Howard Stern even admitted that his signing was the equivalent of a stock run-up, as convergence would quickly kill satellite radio. The audience fed into it by buying a couple of subscriptions; and the car deal was the cincher... a few people are going to get very rich before satellite radio fails.

      Google benefits from good market psychology. Apple benefits from good market psychology.

      AOL used to have this psychology, but they slept on innovation and got left behind. So the street walked away, and subscribers started bailing.

      Then something happened; subscriber base loss stabilized a bit. AIM is the instant messenger analog to google; a free service that has the lion's share of the marketplace.

      It's common for kids in general to be more technically savvy than their parents, but the parents tend to make internet decisions in the household. Internet=AOL is easy for the technophobe parent to understand, and because it isn't broken, there is no need to fix it. This hooks the KIDS in the household onto AIM. I've seen this happen - I help my nephew with his math homework on AIM all the time because his mom equates the internet with AOL, despite the fact that they have comcast broadband at home. There is also the perception that AOL is the easiest way to get your kids online. So the subscriber number for AOL can be misleading, because they have like five or seven screennames per subscriber account. And AOL parental controls gives you a very accurate understanding of your audience demographic, a significant percentage of whom are pre-brainwashed emerging impulse consumers. The American economy is artificially propped up by impulse and trend consuming, so these kids mean a lot to the economy. Hollywood alone lives on summer blockbusters, which depends almost completely on the 13-21 year old crowd. That's why you rarely see an R rated film before the fall.

      So ironically, investing in AOL is one of those paradoxically sound investments. A dying company with a largely ignorant critical mass user base waiting to be told what to do. It's not a quarterly return investment, so it's not sound for the guy up the block or the cash-out investor. If you're a company who wants eyeballs and an association with what Americans perceive the internet to be, then it's a good move that should yield cash down the line as you get those eyeballs where you want them. Fiscally, they have diversified revenue stream that is relatively consistent.

      The other side is that you have to pick this up even if you don't want to, because it leverages considerable revenue power to whomever does.

      I'm surprised that Microsoft hasn't barked down this tree before. It would have been a cheaper purchase a couple of years ago.

      --
      un burrito me trampeó.
  5. Edging into AIM? by DoddyUK · · Score: 4, Insightful

    Perhaps they're realising that Google Talk didn't do all that well, so they're staking a claim in AIM? Can't see any reason other than that, AIM is the only thing AOL has to offer which is even remotely useful.

    --
    Some think the Internet is a bad thing. I just think that AOL is a bad thing.
    1. Re:Edging into AIM? by esaloch · · Score: 1, Insightful

      It makes perfect sense to me. Google just released Google Talk and no one uses it. Now, if we had support for it in AOL Instant Messenger, then I'd imagine you would see a lot of people with gmail accounts starting to use it.

  6. Re:First bad analogy of the thread by ZachPruckowski · · Score: 2, Insightful

    This is like Rolls-Royce being "in talks" with Ford
    How about Rolls-Royce buying a Ford factory in order to learn how to mass-produce their cars?

    Google, somewhere, somehow, has some massive omni-goal. It may be that they want to own the Internet. Or it may be something else. Regardless, they may be trying to learn the basics of and improve AOL's ISP stuff. Or maybe negotiate for the IM access.

    Either way, if they apply "Do No Evil" to AOL's billing, I might be able to quit them finally.

  7. search engine rankings by Marc+D.M. · · Score: 2, Insightful

    The article states that the rumour (Google/Comcast buying into AOL) was false, end of story. Then it goes on to talk crap about what-ifs. I get the feeling that BBC is running this story just to get better search engine rankings at Google, MSN and AOL.

  8. I would like to see Google get AOL by Pecisk · · Score: 3, Insightful

    Not because I hate Microsoft, or what. No. Actually I see Google has VERY serious plans to be big big ISP in US - at least - so it would suit them perfectly. Yeah, they would have to do litle rebranding - AOL branding is seriously damaged with all management lack of common sense last five years.

    Microsoft wanted only AOL because they want Google dead. So, it would prove Microsoft to stop playing these silly games with their monopoly power. And it would be a middle finger for them..

    But let's see. If it is all business, everything will be fine. If it will be some "I want you to be dead" overtones like Bill and Balmer have, then, well it wont end very good.

    How? I don't know.

    --
    user@ubuntubox:~$ stfu This server is going down for shutdown NOW!
  9. When your own valuation is equally stupid... by Shivetya · · Score: 4, Insightful

    it is best to put it to use before someone catches on. If AOL was the most over valued presence on the internet in their heyday I think Google is the same for ours.

    Yeah Google is doing cool things, moving quicker than their competitors, but they are horribly overvalued. The best thing for them to do is buy up as much IP & resources as possible to form the basis of an enduring and broad based company.

    --
    * Winners compare their achievements to their goals, losers compare theirs to that of others.
    1. Re:When your own valuation is equally stupid... by Viper+Daimao · · Score: 2, Insightful

      Exactly. I really dont see how their stock is worth over $300 a share. They are overvalued, and that is exactly why they had a second public offering a few months ago.

      --
      "In the game of life, someone always has to lose. To me, if life were fair, that someone would always be Oklahoma." -DKR
  10. Clearly? by HerculesMO · · Score: 2, Insightful

    Clearly Google's interest in AOL is their huge CD distribution system, widely regarded as the most advanced in the world as demonstrated by my mailbox.

    Uhm... Why would Google want to associate itself with a company whose history has shown it can't keep up with the times, for a mailing scheme? If there is a genuine interest in Google to buy stock in AOL it has to be for more than that, because any idiot with half a brain can put together a decent distribution system. Netflix did it in a year -- imagine what Google could do?

    --
    The price is always right if someone else is paying.
  11. Re:Do No Evil by Narcissus · · Score: 4, Insightful

    Are they required "by law" to maximise profit, or only to do "as desired by the shareholders"?

    I mean take a hypothetical: a majority of the shareholders decide to donate all income to an orphanage. Now are you saying that by law they can't do this, as this would not maximise profits?

    Surely so long as they are doing what the majority of shareholders want, then there is no requirement to make a profit, right?

  12. Re:Do No Evil by Rude+Turnip · · Score: 3, Insightful

    "Google is a publicly traded company. They by law has to maximize the profits for their shareholders."

    By law, they have to follow the terms of their corporate charter.

  13. What will happen? by Conspiracy_Of_Doves · · Score: 2, Insightful

    Will Google purify AOL, or will AOL corrupt Google?

  14. Hi slashdot editors by Anonymous Coward · · Score: 2, Insightful

    Can you read a bit the article ?

    From the header of the fucking article : "Time Warner's chief executive has denied reports that it may be about to sell a stake in its America Online (AOL) unit to Google and Comcast."

    Fuck it really, slashdot is a total waste of time now.
    Slashdot used to have some informations, now it's just garbage, slashdot is as worse as FOXNEWS ( hello the Japanese mafia using a Russian-made electromagnetic generator to launch terrific storms against the U.S. mainland => http://www.foxnews.com/story/0,2933,170064,00.html ).

    And ssshhhhhh the deal between microsoft and AOL is already almost made.

  15. Comment removed by account_deleted · · Score: 2, Insightful

    Comment removed based on user account deletion

  16. Actual revenue stream? by Darth_brooks · · Score: 4, Insightful

    I'm sure the fanboys will rush in with the "flamebait" mods, but....

    Could google simply be looking at purchasing a consistent revenue stream? I mean, how does google make money? Where is its steady source of revenue? There's adwords and......umm....the five people that actually bought google earth pro? They're not really selling much of anything. It's nice that they're being altruistic, but if I'm an investor, I'd like to see them actually make some money

    AOL, if purchased cheap enough, is a cash cow. Scamming a customer base out 22 bucks a month for dial-up and "content" has to be able to earn you a profit once you go all hack 'n slash on the layers of fat that have built up around the company. There's some decent infrastructure there, and a recognizable brand name. It ain't worth 5 billion dollars, but it's worth something.

    Any deal for AOL probably includes whatever's left of Netscape, maybe there's something there worth having, too.

    --
    There are some people that if they don't know, you can't tell 'em.
    1. Re:Actual revenue stream? by r1_97 · · Score: 2, Insightful

      Neither flame bait nor insightful. G already has a growing and steady source of advertising revenue from it's leading search engine. AOL has eyeballs - lots of them to be channeled into users of other G services. Further, don't forget about AOL's Instant Messenger which G doesn't want to see getting into M$'s hands.

  17. Re:Do No Evil by Anonymous Coward · · Score: 1, Insightful

    Here we go with one of those Big Business apologists who feels that they are educating us about why corporations exist. To say "fuck off" to the common man and public benefit, right?

    Buddy, I have heard your ideas before. They're the very same ones that are making our common folk poor and our planet a wasteland. They're the kind of ideas that created the likes of Enron -- a company that did absolutely nothing and managed to make millions before it all fell appart -- a company that completely made up the California power crisis, endangering people's lives by shutting off the power grid to spike up prices.

    Is that really the kind of "me first" attitude on which we should base our society? I don't think so.

    I don't think your views on the laws are correct, but I am not a lawyer so I may be wrong there. But if that is the case, I'm going to say this out right: if the laws are like that, that's not the way they should be. Do you remember slavery? It was the law of the land! By your logic, completely morally justifiable.

  18. Re:Do No Evil by Idarubicin · · Score: 4, Insightful
    Google is a publicly traded company. They by law has to maximize the profits for their shareholders. There is a difference between being ethical and being legal.

    As others have already noted, Google is legally required to obey their corporate charter. In some cases this will mean maximizing profits, but that isn't always true.

    Also, sound and responsible management may involve foregoing short-term profit for long-term gains. Moving all the staff into smaller cubes and replacing them with temp contract workers will result in a short-term bump in net earnings, but it will cost a software company in the long-term when they can't attract or retain experienced and competent programmers.

    Finally, one of Google's most valuable assets is intangible; Google's reputation for being both innovative and not evil has made them the darling of programmers, engineers, and even Wall Street. Tarnishing their reputation for being 'not evil' would be hurting the brand name and identity that they've worked so hard to build. The guys with the money invest in Google because Google can attract the best engineers, programmers, designers, and thinkers on the strength of Google's reputation. Damaging that reputation would be a grossly unsound move for management.

    --
    ~Idarubicin
  19. MOD PARENT UP by JavaRob · · Score: 3, Insightful

    Excellent point. Even if they *were* legally required to "maximize profits", that's a very vague requirement, and it's NOT AT ALL self-evident that being evil, fighting dirty and pissing off your customers is the best way to maximize profits.

    Would Google have the brain-power they have now if not for the whole "do no evil" policy? Not likely. These are people who can choose to work anywhere, or choose to find a place in academia if they find the corporate world too repugnant. Google attracted them, it didn't "buy" them. It doesn't keep them on through intimidation and bribery, but through interesting projects and creative flexibility.