Google Acquires 5% of AOL

Heembo writes "CNN is reporting that Google just acquired a 5% stake in AOL for $1 Billion, shutting Microsoft out of the deal." Under this new agreement, among many other things, Google Talk will now interface with AOL's instant messenger according to the announcement on Google's site. From the announcement: "Google Chief Executive Officer Eric Schmidt said: 'AOL is one of Google's longest-standing partners, and we are thrilled to strengthen and expand our relationship. Today's agreement leverages technologies from both companies to connect Google users worldwide to a wealth of new content.'"

Comments

I recall reading this not too long ago...

[kadathseeker]

Not a dupe, it comnfirms the speculation in http://slashdot.org/article.pl?sid=05/12/16/204231 &tid=217&tid=120

Re:Interesting

[Stonehand]

Reading

http://news.com.com/Google%2C+Time+Warner+strike+1 +billion+deal+for+AOL/2100-1025_3-6003187.html?tag =nefd.lede

AOL gets --
* $1B investment. Not gift, but investment.
* $300M credit for purchase of keyword ads.
* Ability to sell ads across Google's network including third-party sites (!).
* Assistance in opening up the 'walled garden' content to Google's crawler.
* Collaboration on video search.

Google --
* Minority shareholder rights.
* Possibly, more ads sold by AOL's marketing machine.
* Possibly, higher CTR if AOL can do better ad sales -- through knowing more about its users, say (inferred).
* Greater availability of the old 'walled garden' content.
* Collaboration in online video search, which probably includes working with AOL's 'SingingFish' service, and perhaps access to content?
* Interoperability to an IM network with a huge base -- slightly larger than MSN + Yahoo!, last I checked.

There's also a defensive factor; a deal with MSN might have required shifting from Google to MSN, and that would mean some 25-30M search queries per day and ~10% of Google's advertising revenue.

As to how Google might lose, well, if AOL were to collapse, the $1B investment might look like a bad idea; or if the changes drove away too many paying users (through ad clicks, not subscribers). Likewise, AOL might be considered to have lost if Microsoft would have been a better partner, or if people flee AIM to Google Talk, or so forth. But it's an interesting deal from both perspectives, I'd say.

Re:So I guess Google owns 10% now?

[Heembo]

This is NOT a dupe. The previous article was "speculation" and the second was "confirmation". In other words, it is no longer a rumor, it is reality. This is newsworthy and I'm honored that the slashdot staff agreed with my submission.