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Google To Purchase Stake In AOL For $1 Billion

Posted by Zonk on from the that-is-a-lot-of-free-cds dept.

Lord Haha writes "It appears that Google may be on the verge of purchasing a 5% stake in AOL." From the article: "A tie-up with Google would make sense. Time Warner has been losing out online to rivals like Microsoft and Yahoo. For its part, Google may be interested in getting access to AOL's e-mail and instant messaging service. It would strengthen Google's hand against rivals Yahoo and Microsoft, who have well-established webmail and instant messaging services. Google is a relative newcomer to this area with Gmail and Googletalk." More commentary on News.com. Big change from just a few days ago.

8 of 222 comments (clear)

  1. With a budget of $1bn... by Andy_R · · Score: 4, Insightful

    Couldn't Google simply start it's own ISP and grow it to at least 5% the size of AOL? That would give it all the leverage (or more because they can't be outvoted by the other 95%) with none of the nasty associations.

    --
    A pizza of radius z and thickness a has a volume of pi z z a
    1. Re:With a budget of $1bn... by FatRatBastard · · Score: 4, Insightful

      Google aren't buying an ISP, they're buying a relationship. Go take a look at Google's financial statements. AOL accounts for a HUGE chunk of Google revenue. This is exactly why Google, Yahoo and Microsoft have been clamoring to throw money Time Warner's way: whoever got the deal would almost certainly get AOL's paid search / advertisement business. Google and Yahoo want it for the revenue stream; MS less so for the money itself, more for cutting off the revenue supply of competitors (i.e. Google).

      Anything else Google gets from AOL in this deal is just icing on the cake.

  2. How to get around "Don't be evil" ? by Anonymous Coward · · Score: 5, Insightful

    Is this how they get around their "Don't be evil" (phoney) mantra? By buying and outsourcing all the evil to a company that's very good at being evil?

    1. Re:How to get around "Don't be evil" ? by The+Lynxpro · · Score: 4, Insightful

      "Is this how they get around their "Don't be evil" (phoney) mantra? By buying and outsourcing all the evil to a company that's very good at being evil?"

      Yeah, because AOL is SOOOOO evil. They were so evil that they bankrolled TiVo when it was starting out. So evil that even after Netscape became a non-entity, they ponied up money to spin Mozilla off as a non-profit so that development could still happen without pesky TimeWarner shareholders demanding it be closed down. So evil that they partnered with iTunes so that people could use iTunes through their AOL user name, thereby improving the audience of iTunes. So evil that they aided the antitrust litigation against Microsoft. So evil that they partnered with Apple over iChat. So evil that they provided a great deal of bandwidth for popular podcasts like *This Week in Tech* so that the podcasters didn't have to pay for the bandwidth.

      Yep, that's really evil in my book.

      I really wish Google took over a larger chunk of AOL, myself. Tie MapQuest to GoogleMaps. GoogleTalk to AIM. AOL through a Google sponsored Firefox web browser. DigitalCities and MovieFone directly tied to AdSense. WinAmp spun off as an open source non-profit entity. Not to mention leveraging the AOL brand for commercial wifi.

      Oh, not to mention getting back to that Steve Case goal of smashing Microsoft which the rest of TimeWarner had objections to...

      --
      "Right now, somewhere in this world, Scott Baio is plowing a woman he doesn't love," - Peter Griffin, *Family Guy*
  3. What happened to their motto? by kalirion · · Score: 4, Insightful

    Instead of "Do no evil" it will be "Partner up with evil"?

  4. Not News - Guesswork by VirtualAdept · · Score: 5, Insightful
    So, I took a look at the articles in question. No sources named whatsoever, no comments from company officials, nothing at all to indicate that this is actual news and not just news analysts throwing darts at a wall somewhere and hitting "Google buys AOL". Again, for that matter, since this is something like the third time that news reports of this deal have happened.

    Wake me up when actual news occurs - complete with named sources or a press release, or something to make me think that this is more than just some writers trying to sound like they're insiders.

  5. Re:Why? by chrisgeleven · · Score: 5, Insightful

    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.

    Who knows.

    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.

  6. Re:I'm Confused on the whole Good / Evil thing. by dan+g · · Score: 4, Insightful

    If you add a teaspoon of fine wine to a barrel of shit, you still have a barrel shit. On the other hand, if you add a teaspoon of shit to a barrel of fine wine you now have a barrel of shit.