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AOL Fight Narrows To Two Players
BucksCountyCycleGeek writes "Now that Yahoo! has dropped out of the race to control AOL, the field of contenders has narrowed to Microsoft and Google. While antitrust issues continue to cloud Microsoft's bid, it is getting pretty clear that AOL wants payment in cash and not Internet stock. While Google has worked with AOL in the past, Microsoft's resources dwarf them for the moment." From the CNN/Money article: "Time Warner accepted AOL's stock when the old line media company agreed in 2000 to be purchased by the Internet service provider, a deal that proved a disaster for Time Warner's stock value. Yahoo! executives also had concerns about the valuation Time Warner was seeking and possible difficulties integrating the two businesses after any deal, a person close to Yahoo! told the paper."
AOL seems rooted in two old-fashioned categories:
1. "The Internet is the web," whoever makes the content wins (I call it the super BBS text file repository)
2. "The Internet is about connecting people together through my rose-colored lenses."
Both business markets are not ally valid anymore. Smaller ISPs seem to gain users by not making themselves visible as the middleman. The more you've noticed your ISP, the more I bet you've been frustrated.
Creating web content is better performed by billions of people than by dozens. CmdrTaco edits an article, but people come here for the +5'd comments. CmdrTaco couldn't get many +5's on his own (maybe -1 Redundants).
The future, to me, is how to collect all those billions of opinions and creations and make it specifically friendly to every individual user.
Google is heading in the correct direction. I let most of my domain names lapse because of Google. Yet they're still not there yet.
The ultimate web company has to be able to give you what you want, immediately, but also correctly give you items you need even if you didn't realize you needed them.
*Targeted ads you really want to see.
*Content that may be different than what you're used to, but still informative or useful to you.
*Access to information by only knowing some vague part of it. Find that TV show from a line or two. Find that song or book the same way.
*Compensate content creators somehow.
AOL is none of these things. They're an online newspaper and amusement park. *Yawn* I wouldn't pay $5 for them.
Plus, how many people "hate" the name over their junk mail and bad cancellation policy?
As for Time Warner stock, would you want a part of Time? Warner? Maybe in 1985.
Two great evils even more evil together.
evil is as evil does
google and aol? anyone else think thats an odd combo...and fairly frightening?
Bottles.
M$: I want AOL
Google: Me Too!
"goodbye and hello, as always" ~Prince Corwin, from Zelazny's Amber series
to have a growing conglomerate ... despite still being profitable it's a dead-end for any potential buyers, the main thing they have going for them aside from their web portal stuff like AIM is a dwindling user base of 56k users when they could've been an expanding userbase of broadband users ... I guess whoever buys them gets millions of $ in profit per month but if the price is something ridiculous like several years of profit at the current rates you gotto wonder how it can be made to grow enough to justify a high price.
Google are less evil, but more new, so it cancels old-style evil out! New-style evil is less easy to defend against...
I really hope neither of them buy AOL, IMHO it would ruin their products.
Good karma sticks to me like velcro on a piece of plexiglass.
Move along, citizen.
Two wrongs don't make a right (but three lefts do).
Ignore anything I said above, I actually agree with everything you believe - mod accordingly.
I'm not surprised. To me, that says that AOL thinks that buying AOL is going to hurt your stock. If it were a good move, they'd want a piece of the buying company's stock, which would rise after having made such a great acquisition.
Of course, that's not my professional opinion - I Am Not A Stock Broker.
Any chance Google is pursuing AOL just to make sure MS buys them? You know...give'em enough rope and all.
If someone has an AOL account, it means that they don't have a friend in the computer business, in my opinion. Local ISPs almost always give better service, and don't abuse the customer with advertisements. AOL's business depends on customer ignorance, and computer users are rapidly becoming more knowledgeable.
I hope buying AOL is not Google's first huge mistake. Google should offer no more than $6.50 and free soft drinks.
Recently, someone associated with Time Warner (Parsons?) has been putting out a lot of baloney about the value of AOL.
Are you implying Google is still living in their parents' cellar,
downloadin pictures of Sarah Michelle Gellar?
Sigs are for Terrorists.
My money's on MS + AOL. I've been saying they'll merge for years. Despite their hatred for each other, they're quite similar. (Maybe that's WHY they've been such fierce competitors?) They both appeal to technologically-illiterate end-users. They both employ nasty business tactics (AOL's usually lean more towards "annoying" on one hand and "shady" on the other; MS's can better be described as "illegal" and "brutal"; all different shades of evil but all evil!). Neither wants to educate their customers. Both want to build 'walled gardens' around the Internet to some degree. And so on.
With spending like this, exactly what are "conservatives" conserving?
The Borg Collective (a.k.a. Microsoft) and AOL make a rather good match. Look at what they have in common:
1) Crappy, Buggy Software
2) A User base too stupid to realize that there are better alternatives
3) High Prices
4) They rely more heavily on maketing than technical superiority
OMFG, rush them to the altar and see what kind of a two-headed freak baby they produce. It should be well worth it's weight in amusement value alone!
2 cents,
Queen B
HDGary secures my bank
If Google ends up owning part of AOL, I would expect them to integrate AIM with Google Talk. Imagine millions of AIM users being forcibly converted to Jabber... *drool*
AOL sucks so hard that they should sell vacuum cleaners.
This is not a troll. It's the truth after I was "mysteriously" signed up for their dial-up and they started charging my card, even though I don't have a phone!!
Take the cheese to sickbay, the doctor should see it as soon as possible - B'Elanna Torres, "Learning Curve"
Because I never heard such blatant marketing speak from non-bots.
I have road runner service. If you go out to the office to sign up for a cable modem, you'd never know that the same company owns AOL. They don't push it at all.
I'm a single guy with no kids, and for me, AOL doesn't have much to offer. But I know quite a few parents with small kids who are looking for good parental controls. If Time Warner used AOL's parental controls, enforced them through the cable modem, and pushed hard to make a kid/family friendly service, I'm sure they'd do very well with it.
Every parent of a 10 year old I know is convinced of two things about the net. First, their kids *need* it to be competitive in school. And second of all, it's a terribly dangerous and predatory place for kids. No one has a good answer for those parents. The best people can do is say, "Put the computer in the family room, so you can watch what they're doing."
AOL and Time Warner were in an ideal position to deliver a solution for these people. I don't know why they didn't -- it looks like a case of corporate infighting and stupid internal turf wars, but that's pure speculation on my part.
Google provides search technology to AOL and gives AOL a cut of the advertising revenue generated by those searches. AOL earned $300 million from Google search ad revenue last year.
I posted this as a reply to another comment, but this battle is about internet search ad revenue. AOL does not want Googkle stock, becuase if it craters, then they lose money on the deal. Cash is king, and MSFT has $40 billion versus Google's $8 billion.
"I don't think it's selfish, to eat defenseless shellfish." -NOFX
It would be a nonsensical purchase, kind of like if a hardware company (VA Linux) bought a glorified weblog (Andover). Good way to tank your stock, anyhow.
Peace and love, y'all
Year after year, it never loses suction.
Holy crap. The nytimes article DIDN'T NEED REGISTRATION! Now *that's* news!
What? AIM Fight narrowed to two players? I thought AIM Fight was always between two players.
If either Microsoft or Google buy out AOL, we could quite easily see a closer coordination of IM systems. With Microsoft and Yahoo agreeing to link up their systems not so long ago, this could easily give Microsoft a vantage point over Google if they were to consolidate MSN+Yahoo+AIM.
As blasphemous at the combination seems at first, Google is the only way AOL could ever be saved from a death by obscurity. Google could buy it. Fire EVERYONE that was ever involved with it. Completely rewrite all the software, and start offering Google Online branded dial-up, WiFi, and Fiber. Merge Google Instant Messanger and AIM, eventually phasing out AIM's proprietary protocol. It's entirely possible.
--The universe will not be altered by forum threads, even those which are very wry. --Tycho Brahe (Penny Arcade)
Microsoft's resources dwarf them for the moment.
I can't imagine that AOL is worth more than the available resources of either company.
I work for the AOL.
So I am really getting a kick out of most of these replies.
Some of you guys are very good at making it sound like you know what you are talking about.
But trust me.... You don't.
I think you just want to make yourself sound smart, when in reality you dont know what you are talking about.
This is how bad info gets passed around.
If you dont know about the topic....Dont make yourself sound like you do.
Cuz some Slashdotters belive anything they hear.
The comments regarding the worthlessness of AOL's content and services are spot-on, but besides the point. What AOL offers Google is a horde of users. All those eyes can be redirected to Google and their lucrative search and ad system. AOL has been pushing its users outside of its comfortable womb for the past couple of years, and Google can accelerate that process significantly while still offering a familiar subset of services. Google has the vision and the resources to remodel whatever AOL services it deems worthy and, in the case of something like AIM and AOL Mail, fold the service into their similar offerings (Google Talk and GMail). Personally, this would be a great buy - AOL's an ugly chicken, but its drumsticks are delicious.
If Microsoft buys AOL, AOL's new catch phrase should be "The Worst ISP is Now Worser!"
"Burn the land and boil the sea You can't take the sky from me" -- Joss Whedon - Firefly
Perhaps Sony should get on the bandwagon. Imagine: the first DRM'ed Internet browser. They could totally use their rootkits again, I seriously doubt there is anyone that uses the AOL browser that is intellegent enough to notice.
I don't see how this doesn't smack in face the DOJ settlement.
Judge: "So, you have 99% of the desktop market which has given you the browser market due to bundling."
MS: "Yes."
Judge: "So, you want to buy AOL so you can then bundle MSN Search capabilities into AOL in effect forcing them to accept MSN Search much like they do with IE now?"
MS: "Uh...yes."
Judge: "Okay, why don't you just offer a search engine and page like Google does now? And just compete straight up?"
MS: "Heheheh....hehehehhe..hehehe.....ahemm...Sorry, Ma'am, I didn't think you were serious. You see, by buying AOL we can offer this defacto to the customer. They don't have to bother choosing, like they used to with Netscape."
Judge: "Uhh...yeah!? Merger denied. You guys should really do something YOU are good at, not something OTHERS are good at."
1) Google holds on to AOL, but overpays and/or issues stock to pay. This causes the stock price to go down because of dilution.
2) Microsoft buys AOL and denies Google the eyeballs. This also causes Google's stock price to go down.
My read on the situation is that closer ties between MSFT and Time-Warner can only benefit both of them - it creates a diversified media/technology conglomerate which not only has the content but the technology to deliver it with all sorts of DRM. A nightmare for the Slashdot crowd, but a dream come true for RIAA-types.
Google's only advantage here is that they're the incumbent player - it's significant, and there are obstacles in front of Microsoft. However it's hard for AOL to turn away from the green stuff.
You forget that AOL still has a large user base.
Even if the AOL name may be crap, there's a lot of ad-revenue floating in there. Between the user base (AOL Websites, AOL Messenger (big!)), there's a lot of advertising.
Also remember that AOL (IIRC) owns Netscape. Mozilla is a spawn of Netscape, who still contributes to it's development. This is a move for Google to support more Open-source.
The providers know that if all it comes down to is an invisible pipe to the Internet, all they can compete on is price and downtime (and in many areas, downtime is hard for them to control). That model makes broadband access a commodity. You may already believe that Internet access is a commodity, but propagating that view is not in the best interests of the broadband providers right now.
Sorry, but Taco doesn't edit anything that I've seen. He posts a link to an article to the homepage. The editors at those respective publications did the editing. Though I, too, visit Slashdot for the +5 comments, I would argue that none of those comments could exist without the far-smaller number of people who did the actual production of the original content (although, admittedly, I am biased.) I tend to agree here, but all this says is that AOL has done a piss-poor job of its original mission, which was creating value for the end user by providing original content through its own tightly controlled channels. AOL's business model should be that of XM Satellite radio. XM is a delivery medium, insofar as it repackages existing content from people like Bill O'Reilly, but it also generates its own original content and it will go further in this direction as time goes on. At its heart, XM is a content company. AOL could have been the same; it could have been the online equivalent of HBO, but for whatever reason it's mostly blown it -- probably because it set its sights too low. It went for the mass market, every-household-is-an-online-consumer market, when it should have realized 1.) that it needed to get on the Web much sooner; and 2.) that the most valuable customers for Web-based services were technically-savvy people, and that they needed to capture that audience before they trying to woo grandma and her digital camera. I don't know. Without getting into specifics, because I don't have them on-hand, from what I've heard Time Warner is pretty much on track as far as where a big media company in America should be right now. There are definitely rough seas ahead for that business, but if anybody's on the ball it's Time Warner.Breakfast served all day!
I was trying to think of a good ending to the "he'll eat anything." bit, when I realized that both of these companies are the ones that tend to do just that...
Who will be the AOL Mikey?
-- it's ridiculous how many people misspell ridiculous... (damn, damn, damn...)
Two Players Narrow AOL Fight to you!
AOL funds Mozilla developers, so if MS bought AOL, I can only imagine what would happen to them.
One interesting artifact of AOL's bubble valuation is the governing rates for "Small Webcasters" compulsory royalties, as set by the Library of Congress Copyright Office. A consortium called CARP (really the RIAA) arbitrarily asked the LoC for $0.0012 per listen per song for the copyright holders when streamed by orgs making less than $5M:year from the streaming operations. The LoC reduced that, to a number derived from AOL's purchase of Mark Cuban's Broadcast.com. They took the purchase price and divided it by the number of songs licensed for streaming, and came up with $0.0007:listen.
That price is insane. AOL bought Broadcast.com for Internet stock, at AOL's highest bubble price - not cash. They bought all of Broadcast.com, not just the song licenses: hardware, customer "eyeballs", the brand, the staff, etc. And the derived price would still be the price per license, not per listen, which is what they applied it to. In short, realisticly basing the royalty on that bubble purchase should result in at most $0.00007, 1/10th, or maybe closer to $0.000007, 1/100th (142,000 plays per dollar).
Of course, the vast decrease in costs of "jukeboxes" would destroy the fat record companies, whose Hollywood corporate owners prop up the political establishment at the expense of the people, so we got the shaft. The proof of the shaft was the mandatory minimum fee for streamers, which is $500:year. Since even the $0.0007:play rate for 4 minute songs continuously for 365.25 days per year is $92, the $500 minimum means stream servers would have to collect from at least 5-6, or more like 20-50 listeners just to meet the minimum. Which means smaller servers, like hobbyists or other nonprofits, are locked out of streaming.
Now that the AOL purchase price is being "reevaluated" (again, after its disastrous effect on TimeWarner's stock for years), we've got another chance to reevaluate those "Small Webcaster" rates. They absolutely must drop the mandatory minimums which create a club for solely profitable streamers. And they should reduce the rate itself, so people who stream to a handful of friends can pay less than they do for their email. That would multiply the streaming activity across all kinds of people, especially to mobile devices. Which in turn would generate more total royalties, even at the lower rates. And those publishing royalties are much more highly recouped by the artists, rather than just stolen by the record companies (though it's still more unfair than fair). I guess that's why the fees are set where they are. But we don't have to like it. And with AOL's "miracle" now totally debunked, it's time to get rid of it.
--
make install -not war
Combine AOL accounts with Google Accounts.
Combine AIM and Google Talk.
Allow users to get @gmail.com accounts.
Fix and streamline the software interface. In fact, just make a new one. AOL's in unfixable. Add wi-fi and broadband access. Change the stupid rules in the chat rooms to allow people to say "boob" if they are so inclined. Replace the shitty ads with google ads, mostly text.
I would leave out integration of Google Groups to keep the quality of threads from deteriorating any further.
Then show lots of ads, and make a nickel a few million more times a day than before.
What's the problem? I don't see the problem. But then I *am* just an anonymous coward.
I know one thing for sure: it would increase revenue to google answers!
First let me state that I believe MS will win against Google. Also let's point out that AOL accounts for 12% of Google's annual revenue, and that is nothing to laugh at ($380million). The NY Times has also reported that MS is the front runner. http://www.newratings.com/analyst_news/article_110 3765.html
So what is at stake and why is AOL so important? Well take a look at these stats (as reported by the NY Times the nation's paper of record).
September rankings
1. Yahoo: 123 million users
2. Time Warner (AOL and related sites): 119 million
3. MSN and other Microsoft sites: 114 million
4. Google: 87.6 million
Combine AOL and MSN and they almost double yahoo and are almost 3 times Google! Advertisers will KILL to get their ads in front at that number of possible people. As far as Google's superior tools... they aren't THAT much better. 87.6million vs 233million is a big difference and lets face it MS has very good developers, lots of resources, and will catch up. They always do.
Now where is the growth? Well, the real crown jewel is getting access to Time Warner's arsenal of media content. Most people expected the next big wave to be media, and AOL is the gateway to one of the biggest deposits on the planet.
The winner of this battle wins more then just bragging rights. If MS beats out Google, it's going to be a HUGE hit for them financially. It's more then just loosing their 12% of revenue each year. It will also mean they will loose their premier advertising title. People will start throwing money at advertising with MSN strictly for the numbers, and that will result in more losses for both yahoo and Google.
This is much more then a warning shot across Google's bow. I see this as a precise incision, not at Google's hear, more like cutting off one of Google's legs. They can live without it, but in a race you do best with both legs.
I hope google wins this bidding process. (I have to use M$ for work) If AOL is the devil that I believe they are, imagine the pain it would cause when all of the AOL software is bundled into the OS. This could end up being an issue large enough to cause people to jump off the Microsoft Ship.
and to you, I say,.. good day
Reading the comments here, it's not clear to me that people get why AOL is suddenly so valuable and has multiple suitors. It isn't the dialup business. AOL has about 20M customers and that number is falling month over month. So nobody is actually expecting to build a business around dialup (although quite a cash source currently). What Microsoft, Yahoo, and Google want(ed) is:
- AOL's immense demographic information and purchase history etc on a large segment of the population. This is much much more valuable to MSFT and GOOG because they don't currently have much of this.
- AOL's content network. AOL has a large content network that garner substantial number of impressions every day. You might not like their content, but a great number of people do. This is valuable to MSFT, GOOG, and YHOO.
Why is all this suddenly so important? Check what has been driving Internet revenues over the last 3 years (especially Google): advertising. Search engine advertising is beginning to top out in the US, there is only so much more growth to be had there before it flattens out. The next surge must come from advertising on content networks (Adsense, Yahoo Publishing Network etc). Suddenly AOL looks like a big prize: lots of impressions, captive audience and tons of fine-grained consumer data.
Yahoo was never a serious contender in this race, they don't have the kind of valuations that AOL would want, and they have a vast repository of consumer information already themselves so the only value to buying AOL would be to ensure that Google and Microsoft don't get their hands on it.
Time Warner "acquired" AOL in an all-stock deal, and now has something that's only worth a fraction of the price at the merger. I can understand why the TW execs and stockholders are a little skittish about accepting stock in lieu of cash.
It's LOSE for the love of god. This has to be the most misspelled words on the internet ever. Your mother is "Loose". You "lose" your keys. FUCKING A MORONS
People forget that Google is an advertising company, and needs people to turn into Soylent Green and sell to their clients. Microsoft on the other hand is a software company, and since AOL users are the people to poor and/or cheap to get high speed, they sure aren't gonna go spend $400 on a legal copy of Office or an Xbox.
In the end, Google wins with the uneducated poor people that are susceptible to advertising, or even notice ads. Microsoft has no use for them.
But really, we're all just better off without AOL.
- Adam L. Beberg - The Cosm Project - http://www.mithral.com/
Loser gets AOL.
Say hello to my little sig.
The logic that you can buy percentages in every part of the computer market is why HP had that disaster with Compaq. Microsoft will be able to buy their way to the top for a little while, but there is a big world out that that never grew up on AOL 56k dial-up. AOL is on the decline- even with MS backing.
While... MS isn't smart about anything other marketing garbage products and buying political influence, I was very surprised to find a real technology company Google wanting to buy AOL, which on the face of it, seems like paying a premium price for a seat on the Titanic after the iceberg hit.
Tech Public Policy stuff
AOL sends a lot of traffic to Google since Google provides the search results for AOL. I thought that I had read that this is noticeable chunk of revenue for Google, but looking at AOL's site, I'm not entirely sure how that works - I don't see Google Ads.
Anyway, if Yahoo or MS/MSN bought AOL, that traffic instantly goes away. That's the reason that I've heard for Google even being interested in AOL. It's worth mentioning that Google is by no means a monopoly in search traffic. It's probably pretty close to a monopoly with the Slashdot crowd, but overall, it's not. MSN, AOL, and Yahoo are quite popular with different crowds for various reasons.
Comment removed based on user account deletion
The best people can do is say, "Put the computer in the family room, so you can watch what they're doing."
That's pretty effective. I remember growing up that the telephone and television were both in high traffic areas. And I can't imagine anything other than only allowing visits to white-listed sites being more effective than regular glances over their shoulder.
I can't believe that no one is seeing why Google wants AOL. Think about it, AOL may be a stinking pile of crap network that is sinking fast, but it still has millions of users, most of whom are oblivious types who will quite happily run whatever software AOL tells them to (and shoves down thier throat with it's automatic updates). Google would love to get thier hands on that user-base, run all their searches through Google, offer them other Google-based services, switch thier browser to FireFox (think the Google/FireFox deal of late), can you imagine how great it would be to take another 10-20% share away from IE in the browser market? Google has so much they can throw at AOL users in terms of thier own services, and with the creative minds at Google I'm sure they can come up with ways to leverage the AOL buyout that I can't even dream of now. And that's not even taking into account AOL's huge network. AOL/Time Warner may not have been able to run it very well, but Google knows how to make networking systems sing. The AOL network may be crap right now, but I have no doubts that once Google gets control of it that will change dramatically. So why does Microsoft want AOL? Simple. If Google gets AOL it will hurt Microsoft ... badly. Microsoft will pay *anything* to keep that from happening. So while I'd really love to see Google end up with AOL, I fear that Microsoft will be the one who ends up with it, because they have the greater amount of capital to invest in AOL and while Google sees this as a great opportunity, Microsoft sees it as do-or-die.
Windows is a bonfire, Linux is the sun. Linux only looks smaller if you lack perspective.
AOL bought netscape for the exact same reason. They thought all those eyeballs focused on the (default) netscape.com web page would be a great asset. It didn't work that way.
As long as google is better able to target and get a better click through they have nothing to worry about.
evil is as evil does
there will be an exorsism.