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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."
You are completely right, but a bit late...
But, If you've done business with AOL in recent months, you know that neither of your 2 categories are going to be true for much longer.
They're opening up, they're making many of their internal services public, and they're going to start pushing some very good content to the masses in the very near future. It's lined up. It's almost ready. It's completely new for AOL, and it's designed to completely change the mentality described in your post.
Video for Online Dating Profiles
Google's "Product" is targeted ads (Though they do offer a handful of other services). If Google gets AIM, with millions of users, that is millions of eyeballs looking at their ads for extended periods of time. I wouldn't be surprized (but maybe a bit spooked) if they would run your messages through AdSense every so often.
Microsoft, on the other hand, well... apart from bolstering their MSN messenger network and traffic through their web services (not a source of revenue for them, really), I can't think of any direct benefit for them.
And remember that whoever gets AIM also gets ICQ.
=Smidge=
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.
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.
You bring up some excellent points, although I think there might be people that still want the hand-holding experience initially, I just don't think it's necessary or desirable for many, and will be for even less, as net usage becomes more and more ubiquitous.
As to the ISP, you're dead on-I pay them to provide me a pipe and leave me alone. The only time I have to care that they exist is when that pipe ceases to work. Now, that doesn't happen often, and they're very responsive to problems, but by definition, when I'm talking to them, there's -already- something wrong.
I don't want "targeted content" from my ISP, I don't even use their mail accounts. Fortunately, I've got a good one-they've got all the standard crap in their AUP that you're not supposed to do, but they sure don't seem to actually care if you do it. (Not that I would, of course, do any of it. Just hypothetically. Really.) This is a Good Thing (TM), both for me and for them, because harassment from them over it would be just another (unpleasant) reminder of their existence. And for me, I require basically -no- support (other then when their hardware fails), they won't support Linux anyway, so you're rather on your own if you don't want to do the Microsoft or Apple bit. In that sense, I'm the best kind of customer-I send them their check and leave them alone.
Come to think of it, I'd sure love to see a discounted service offering like that-provider cuts the price in half, and in exchange, they support absolutely nothing except the hardware outside. Now that's sure something I'd look into, especially if it offered very high speeds and didn't (even technically) then forbid you from doing anything worthwhile with them. I'd sure also love to see some worthwhile upload speeds.
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).
By definition, the power of the net is that anyone can create content. Also by definition, a good part of that will be crap, but I've sure found a lot of gems too. Make it easier to sort the gems from the garbage, and I'll be very interested. Google's ranking system really does seem to do well at this, at least for sites that are already relatively popular, but I'd love to see more resources that gear toward more obscure content.
For the rest-Google's actually got the targeted advertising bit down. I've got adblock right here, and I block most everything. But I leave the google ads alone. I quite often find them relevant and useful, and take me to something I might actually be interested in purchasing, but at the same time, they're quiet and unobtrusive. They don't jangle in my face, visually distract from the content I'm trying to view, or (ABSOLUTE WORST SIN, and thank goodness for flashblock) make noise.
Different content? Absolutely. Maybe a "recommendation" system? I'm not sure how it would be implemented, but I think it could be. Although, of course, hyperlinks take us a good way there already.
Also correct on the TV show/songs/books-although I find it's actually easy with songs if you know a line, that line along with "lyrics" usually brings it right up. TV shows sometimes have a transcript posted, so a line for them can quite often hit as well. Obviously, publishers frown on having "transcripts" of their books posted, so that's a little harder...hell, they're even trying to stop Google from doing it in a way that would benefit them immensely.
*Compensate content creators somehow.
You mean they're going to start PAYING me to write those +5...oh...damn. Well, it was a nice thought. In all seriousness though, most who put "content" up don't need or want paid-certainly, no one's paying me to post here, it's just something to do. I enjoy the opportunity to converse, debate, and read what others doing the same have to say, that's payment enough. As for those who do, I like the EFF's collective license model, but other ones exist too. Hopefully it'll come down to something a lot better then the current system of draconian copyright controls. I'm not holding my breath, but I am still holding out hope.
To fight the war on terror, stop being afraid.
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.
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.
AOL funds Mozilla developers, so if MS bought AOL, I can only imagine what would happen to them.
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.
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.