Slashdot Mirror
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.'"
Why not help both? Google gets a network for its messaging client, AOL is now influenced partially by google, maybe opening up Oscar in the future?
1. Google buys dark fiber
2. Google builds instant datacenters in shipping containers
3. Google buys stake in dying dialup ISP with millions of users
4. ??? (Do I really need to spell it out?)
5. Profit. A whole lot of it.
it seems that post-IPO Google is abandoning a few of it's old principles in the pursuit of the almighty buck
The naivety around here is mind-blowingly astounding.
Google's original, super-clean, no-ad interface was a differentiation to get them attention and eyeballs. Sure enough it worked wonders, and all of the techies and geeks (and overlaps between them) were raving about this great new search engine, encouraging all of their friends and family to use it as well (a no-pay sales force). Soon enough they started introducing those differentiated text-ads (which had a good click through rate because they were novel), and the rest is history.
All of that was in pursuit of the almighty buck. The fact that someone could say that the company is now doing something in pursuit of the almighty buck, while this young company sits with a valuation of $127 billion dollars, is astounding.
I was wondering if using google now required an extremely crappy browser, a popup laden program installed permanently on your machine making it crawl, and a service which is free for the first 3 months, then too expensive for the bandwidth provided.
I stopped using AOL/ICQ a long time ago. It used to be popular, but AOL did a terrible job of maintaining that service. AOL's program and its assorted popups and ads were the predecessors of modern spyware and that has tainted AOL in the public's eye for the while. I think they should keep the customer base, but any future software endeavors headed by google should not include the AOL name.
AOL Google. Somehow sounds like Microsoft Linux. It doesnt fit.
"Give orange me give eat orange me eat orange give me eat orange give me you." -Nim Chimpsky
I've predicted before that it'll become fashionable to hate Google. Looks like that's starting to happen. Am I Nostradamus? Heh, no. I've seen a pattern here over the years. Any time an entity becomes big (especially when it's big because everybody wanted it), there are those that learn to live without it, and they feel superior. They speak out and stand behind some rival product that has benefits but is generally pretty far behind, and others who want to look as smart as they do chime in. Karma flows, and before you know it, the zealousy starts. After a while, those that switched sometimes come to the realization that they were actually better off with the old entity or product, so they switch back, then they're accused of having some sort of vested interest in the success of that entity.
I imagine there'll be some head shaking after my post. That's cool. I just think that within a year or so, there'll be colorful posts about how to live without Google. "I don't use GMail, I use some other new mail app because it supports color in the subjects. (Score:5, Interesting)"
Just so it's clear, it's not my intention to be insulting or 'right'. Mainly, this is curiosity. I'm posting this, then I'm going to bookmark it. In a year or so, I'll check back on it and see if I nailed it, or if I was once again talking out of my booty.
"Derp de derp."
In a different light, I dont think Google would turn into AOL for the alimighty buck. In fact the almighty buck dictates google to stay this way and turn AOL like itself.
AOL hasnt been doing too well recently, but Google has been. Everyone can see whose philosophy works, and whose philosophy brings in the almighty buck.
We know this is good news for google, just not how good of a news is it?
Google bought a browser, and is now buying a major customer base. Theyve bought lots of dark fiber. Theyre in effect buying everything that surrounds a person, everything that a person uses to access the outside world. They wont risk losing such potential by making or using crappy software all of a sudden. If they allow people to use Linux, and one day remove ALL references to Microsoft on the Internet (the way Microsoft once tried for Linux websites), imagine the fallout. Google may be far more evil than AOL and Microsoft combined.
"Give orange me give eat orange me eat orange give me eat orange give me you." -Nim Chimpsky
You nailed it on the head. Google is an advertizing company. Plain and simple. Everything they do has a purpous: to get more Advertizing $$$. They don't do cool projects just because they are cool and because they help people. They do them because it brings in more advertizing dollars.
If they dominate the Internet that essentially trumps anything MS Windows can do. Microsoft has the Windows desktop. Google wants to be the Internet's home page. Which is more powerful? Which is more evil?
I'm a bit worried because if the Internet is taken over by an advertizing company you can kiss your privacy out the door! They'll collect every bit of info about you and your habits and connect the dots like not even the NSA could do.
When a good company buys a bad company, the result is usually mediocrity. It's can be much harder to fix a crap company than to start fresh and build it right.
However, that isn't what's happening here. Google is only buying 5% AOL, and they already have a business relationship. Google crunched the numbers and determined that one Billion dollars was the right price to pay for renewing their lucrative contracts with AOL, establishing some new contracts, and disrupting Microsoft's plans.
Once they became a publicly traded company, they then had one responsibility. To maximize shareholder's wealth.
Why do people assume that this is true of publicly held companies, but not true of pre-public companies working off of venture capital and private investment (even, Mom's cash)? When someone gives you a more modest pile of cash to help grow (or prevent the early demise of) a start-up company, you are already working to make that investment worth it (unless you want to lose your investors). Whether you're dealing with friends and family investing, or public shareholders, you'd better be doing your best to honor those investors' faith in you.
Don't disappoint your bird dog. Go to the range.
/. crowd: Get your head out of the sand...
/. population likes.
One of Google's issues right now is diversification of revenue streams. Most of their revenue comes from search and ads. They need to find more revenue from different areas, so what if they decided to provide the backend search and advertising infrastructure to AOL? AOL still provides the same interface and experience to it's users while Google still gets to have it's same interface that the general
What if google provided AOL with the ability to provide customized Ads to AOL users instead of AOL having to perform the work? It's called outsourcing, execute what you are good at and outsource the rest to people that are better at those tasks. If Google is good at displaying the correct ads, then it's in AOL's best interest to leverage this ability. AOL pays for this service and then Google has one more revenue stream.
Actually they structured their IPO such that this influence would be smaller than normal. I recall all the blowhards on the 24-hour news stations' business news shows telling everyone not to buy the Google IPO for long-term gain because of this. If I recall correctly, there are two types of stock shares: those owned by various people in Google, which get 10 votes per share; and those owned by the public, which get 1 vote per share.
Yes, obviously they want their stock price to go up. But they aren't nearly as accountable to shareholders as most public companies.