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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.

9 of 222 comments (clear)

  1. The Day the Music Died by Anonymous Coward · · Score: 1, Interesting

    Mark this as the first day Google started to become Big Corporate Dumb.

    It has begun.

  2. Re:New instant messenger? by mccalli · · Score: 4, Interesting
    I like the pun, but I'm going to take the idea seriously for a moment.

    Google do a Jabber-based service. AOL of course do AIM. Do you think they'd consider merging the two networks? Because a Jabber-based AIM would be a major boost for the protocol. They're adding voice to it, perhaps video next?

    Of course I'm getting ahead of myself, 5% is just that - 5%. But still, it's worth a thought. And yes, I'm biased. I'm an iChat user which supports Jabber, and it would be useful to have the Jabber protocol grow in functionality and see the Jabber gateways to other networks start acting as a universal switching point.

    Cheers,
    Ian

  3. It was bound to happen... by ajdowntown · · Score: 3, Interesting

    Ok, this could be a great thing for google. Granted, 5% is not a lot of stock by any means, but it is a start to gaining even a larger user base.

    Think about people who use AOL. They don't tend to be people that use anything else. So, imagine a google branded browser, automatically using google search, being able to check you aol mail in gmail, and talking back and forth over the aim network. And, even above that, AOL still owns some broadband ISPs, so if Google were looking to get into the market, this is how they could do it. While AOL might be a sinking ship, Google is exactly the company that could bring them out of the slump. So, as I see it, a win-win situation for both companies...

  4. Re:Is AOL really worth... by Anonymous Coward · · Score: 1, Interesting

    That's kind of the point of the whole exercise. Carl Icahn wanted to spin AOL off because he thought it wasnt fairly valued inside the TW empire, and that if it was on its own as a company with its revenue/earnings/outlook, it would gain a higher price. This deal with google in effect achieves the same thing, because it puts a concrete value on the stock. The general idea is not that AOL is worth 1/4 of the entire market cap of TW, but that TW stock is currently undervalued, that the whole is currently less than the sum of its parts. Please note that this has nothing to do with AOL being a "good/bad/cool/dorky" company. Its a pure numbers game.

  5. Re:I'm Confused on the whole Good / Evil thing. by protolith · · Score: 3, Interesting

    If Good Takes over evil, Does Evil become Good or is Good turned to Evil.

    Has Google become 5% evil or has AOL become 5% good. Or Does good and evil cancel each other out, is Google now 5% neutral. Is Google now on its way to just is... not good or evil?

    I guess we will have to wait and see if Google becomes Skynet...

  6. favored placement for aol? by slizz · · Score: 5, Interesting

    from a nytimes article on the subject: "Google, which prides itself on the purity of its search results, agreed to give favored placement to content from AOL throughout its site, something it has never done before."

    i dont know if this means that google will be changing search results, but if it does, this is a pretty drastic philosophy change, and something that seems to bode extremely negatively for googles future

    1. Re:favored placement for aol? by daviddennis · · Score: 2, Interesting

      Good observation, but the article's pretty vague about it. It could be something as simple as AOL soaking up unused ad inventory. For example, i notice that if I search for the lamest keyword in the world, I get "Buy your xxx at eBay!" Maybe we'll get "Discuss xx at AOL!".

      D

  7. Furthermore... by zeitgeist_chaser · · Score: 2, Interesting

    You are absolutely corect that it costs less for Google to buy into AOL than to see its AOL revenue disappear. What no one seems to be saying yet is that Google can use its part ownership to increase its AOL revenues. Can you imagine the kind of financial windfall to Google if they managed to push Adsense into AOL email or even AIM? That's a LOT of potential clicks from a large and captive audience.

    --
    While thinking philosophically, we see problems in places where there are none. -Wittgenstein
  8. Re:Why? by IANAAC · · Score: 2, Interesting

    Not to mention the tie-ins to Time Warner's assets.