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Google Acquires 5% of AOL

Posted by ryuzaki0 on from the googleverse dept.

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.'"

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  1. Interesting by Kickboy12 · · Score: 5, Interesting

    AOL has a reputation of being a bad ISP, and also creating bad software for it's users. Will this move help AOL, or hurt Google?

    This could get interesting. (fp?)

    --
    google.slashdot
    1. Re:Interesting by Sterling+Christensen · · Score: 2, Interesting

      I thought all this was is:
      1. Google pays AOL $1 billion
      2. AOL pays a tiny percentage of it's profits to Google
      3. Google gets a say (a 5% say?) in AOL's policies etc

      So how could this possibly hurt Google? It's not like this is a merger...

    2. Re:Interesting by typan · · Score: 2, Interesting
      It's been reverse-engineered enough that we can use it anyway.

      Well, "We" can use it sure ... but a major corp. can't. Not without fear of some legal reprisals.

      I don't really understand what Google is up to with all this but if one part of it is to unify the IM market, I think there is a lot of potential in it. Wouldn't this be a pretty big deal then - The first step towards real interoperability?

      For as much as IM is used, I think the market pales in comparison to what you could do with a system where everything interoperates like email.

    3. Re:Interesting by mrm677 · · Score: 4, Interesting

      AOL has a reputation of being a bad ISP, and also creating bad software for it's users. Will this move help AOL, or hurt Google?

      Say what you want about AOL, but its the only software my 70-year old mother-in-law can operate. She still doesn't understand the concept of mouse-dragging and double-clicking an icon is a stretch for her.

      Yet she is an e-mail queen with AOL!

    4. Re:Interesting by FireFury03 · · Score: 2, Interesting

      AOL has a reputation of being a bad ISP, and also creating bad software for it's users. Will this move help AOL, or hurt Google?

      I'm not sure they have a reputation of being a "bad ISP" - they have a reputation of having a very large clueless userbase, which is not the same thing (if anything it might demonstrate their software is easier for clueless people to understand).

      Admittedly they've made some fundamentally stupid decisions which has probably driven away a proportion of clueful users whilest making clueless users think the service is "better" (for example, their over-agressive spam filtering. Clueful people will be pissed off that it's overagressive the the clueless will think it's "better" because they're getting less spam).

      Personally I wouldn't use any of the ISPs run by massive companies - I don't think any of them are any good:

      NTL run an ISP with a terrible quality of service (they do things like run transparent proxies which break all the time and being transparent you can't just tell your browser not to use them). Also have a habit of completely ignoring abuse reports.

      BT have a history of doing some fairly stupid things such as NATting their dialup customers, etc. Their technical abilities also seem pretty variable when things go wrong. If you read NANOG for long enough you will see complaints about BT ignoring technical requests from other ISPs too, which is rather bad form.

      Demon were a great ISP until they were bought by Thus, at which point the quality of service went downhill and it appears the directive came from management to never admit something was their fault. Before they were bought they were happy to tell people there was a problem with their network but after Thus acquired them they would always deny there was any problem leaving the customers spending hours believing the fault was on their own equipment.

      I suppose smaller ISPs manage to pick a small group of very capable employees whereas large companies seem to have a higher proportion of employees who really aren't qualified to do their job.

      --
      http://blog.nexusuk.org
  2. G to the N to the A to the A by Anonymous Coward · · Score: 5, Interesting

    It's about time there was some co-operation between IM networks. I wonder if this also means that AIM will be open to other Jabber-based networks to connect to easily - perhaps they are implementing a Jabber server based interface to the AIM network?

    This reminds me of the transition a couple of decades ago from multiple distinct email networks (Compuserve, AOL, BITNET, etc) to the one unified email system we have now. Hopefully in a few years it won't matter what IM network we are on to be able to communicate. And ideally, one's email address and IM address would be identical.

    1. Re:G to the N to the A to the A by shenanigans · · Score: 2, Interesting

      I can just imagine the chair throwing going on at Microsoft when they heard this. I hope you are right, that this means consolidation between IM networks. However, it also means locking MSN out of such a network, since MS isn't likely to make a deal with their greatest enemey, Google, at least not without considering it a huge defeat. I think they will be forced to in the end, though, if the non-MS network grows large enough.

      BTW, the email = IM address is already true for both MSN and Google, isn't it?

  3. I have to say, I'm a little worried... by AEther141 · · Score: 4, Interesting

    With the arrival of graphical ads and corporate aquisitions it seems that post-IPO Google is abandoning a few of it's old principles in the pursuit of the almighty buck. How long before "Don't be Evil" is gone too? I could kinda live with Google's pseudomonopoly on searching back when their character was spotless, but this may well be the first lurch down a slippery slope. It may just be paranoia, but I think the days of trusting Larry and Sergey are coming to an end.

    1. Re:I have to say, I'm a little worried... by Anonymous Coward · · Score: 2, Interesting

      You should be worried, because part of this deal is "favorable results" for AOL content.

      Just as predicted, Google's going down the same sewage hole as every portal before it.

  4. Jabber? by nukem996 · · Score: 4, Interesting

    I wonder if this means they will be going off standard jabber, using the AIM protocal, or will google setup a gateway for Jabber on google servers? Google has also announced full third party client support(gaim trillian etc), does this mean it will be extended to AIM? This could help the IM world get a little more organized.

    1. Re:Jabber? by ari_j · · Score: 2, Interesting

      I have a related question. Back when I was heavy into Jabber, I found that the inter-protocol transports lacked something that, to me, was a show-stopper. Their developers were of the mindset that "We don't know why you would want that feature, so therefore it must be worthless to anyone and we will not even look at your patch that implements it." I do not know if this applied to the AIM transport, as at the time I did not use AIM.

      Anyhow, the feature is this: The Jabber protocol is the single best there is at handling multiple connections to the same account. Each connection can be uniquely identified so messages can be directed to a particular one, and it is easy to control which one gets messages directed at an account but not to a particular connection from that account. However, the transports all vomit (either gracefully or not so gracefully) when confronted with multiple connections to the same account. They should not. They should do smart things like not crash, and deliver messages to the highest-priority connection. They should track the away/available status of the highest-priority connection (updating to track the highest remaining priority after a connection is terminated, and so forth). In general, they should be as good about this as the Jabber protocol itself is.

      Crummy interoperation with other IM networks is why I quit using Jabber despite my love affair with it (I even built a general-purpose distributed computing system for my undergraduate thesis project, using Jabber as the communication layer - my project remains the only one with all of its features, to my knowledge, thanks largely to its use of Jabber).

      Will a Google Talk AIM gateway suck or will it be a good thing, in this respect?

  5. Something doesn't smell right about this by CokeBear · · Score: 3, Interesting
    There are good guys, and there are bad guys. (Yeah, I tend to see the world in black & white). Google was one of the good guys. (Also Apple, Nintendo, etc) and AOL was one of the semi-bad guys (along with Microsoft, Sony, etc). This messes up my whole worldview. I'm confused now.

    Also, Google and all their tools and toys seem to be something that is more smart people (lets say the top 50% of technology users) while AOL tended to be something for the dumber folks (lets call them the bottom 50%).

    Actually, now that I think about it in that context, makes perfect sense...

    --
    Reality has a liberal bias
    1. Re:Something doesn't smell right about this by fermion · · Score: 2, Interesting
      It is interesting to read all the comments. First, google, by any standard, is evil. It makes it money not be creating a product, but by aggregating content in such a way that they can attract eyeballs and sell advertisement. This is not necessarily bad, as advertising is necessary, and google is relatively low key. What is does mean is that the average user is not Google's customer and therefore Google, as a business, is not going to be primarily responsive to the need of the average user.

      That said, this deals makes a lot of sense. I don't think it makes Google any more evil. In fact, as this merely continues a relationship with AOL, I don't see much changing at all, except for the stated added services for the user. I also don't see this as a mistake for AOL. Any deal with MS would have tied AOL to the MS Windows platform, and made AOL a pawn in MS plan to dominate the internet with Vista. Since one can no longer depend on MS dominating the desktop market, and since AOL desperately needs to slow the shrinkage of it's user base, AOL should try some radical plans. For instance, with Google, perhaps AOL can help users migrate to a Linux OS in they same way they helped users migrate to the internet.

      I think we would have found that a deal with MS would have spelled the end of AOL, as MS would have just co-opted technology, bought the customers, then left with a bigger and stronger MSN. Now, Google and AOL can compete strongly with MSN, and perhaps take advantage of the opening made by the upgrade to Vista. It will be good for Google because it will no be more difficult for MS to simply buy Googles customer base. It will be good for everyone becuase even though more stupid people will be using Linux, such are the sacrifices we must make if we actually want a world not dominated by MS. I am fine as long as long as the stupid people stay away from Apple.

      --
      "She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
  6. Maybe someday... by quantum+bit · · Score: 4, Interesting

    If Google Talk gets connected with the AIM network, and Google eventually allows Jabber server-to-server (big if, I know), I might possibly be able to talk to my friends on AIM without having to use Oscar...

  7. It fits their knee-jerk emotionalism by CHESTER+COPPERPOT · · Score: 1, Interesting
    /., and any group for that matter, will react with knee-jerk emotionalism on any issue which doesn't fit their in-group idealogy. I remember Steven Pinker stating once it's not that groups of people act immoral it's actually that groups are driven by too much morality that leads to a sense of outrage and irrationality. When groups, like /., start calling things evil they are just as bad as the ID-mob and other God-driven agendas, they are confirming their in-group values whilst bespeaking devils of anyone who doesn't conform.

    You'll see many a /.'er claiming the devil within Google, with little to back it up of course but value judgements on their behalf. In this case: capitalism/business is evil.

  8. I gotta say by lagerbottom · · Score: 2, Interesting

    I have been giving AOL a lot of thought lately. And I really think there is something to the 'Value-Add' market for broad band. I think there is a real market for a company to come along and offer services that augment the highspeed "experience". If AOL does it right, they could still be a viable business once the dialup world has coughed it's last spasms.

    --
    "He was a wise man who invented beer." - Plato
  9. It's an old story ... by kitzilla · · Score: 5, Interesting
    ... a scorpion spotted an old dog by the river.

    "Carry me across," begged the scorpion, "and I promise not to sting you."

    The dog was wise and slow to reply. "I don't think so," he growled. "I've never met a trustworthy scorpion."

    "Today you have," hissed the scorpion with as much of a smile as he could manage. "I'm not evil, like other creatures of my kind. Besides, if I stung you, I'd drown. Carry me across and I promise all will be well."

    The dog relented, taking the scorpion on his back. He paddled out into the current. Halfway across, the scorpion stung him behind the neck.

    "Now we will both surely die!" the dog moaned as the venom began to take hold. "Why have you done this?"

    "Because I am a scorpion, of course."

    --
    This is my post. There are many others like it. If you don't like what you read here, go try one of the others.
  10. It's all about the AIM by seanduffy · · Score: 5, Interesting

    The AIM of this deal is clearly to take over the instant messaging market, aka, AIM. With Google's ability to throw together amazing software (look at Gmail), I see a skype-esque but better client that supports itself via ads by scanning your conversations (maybe - if they push it that far - backlash might be too big). Personally, I would not have a problem with that, but I say no to cyber sex.

    Google had to sacrifice quite a lot to snag this deal but if you take over instant messaging, you can take over voip, hence, you can take over telecommunications when cell "phones" can simply operate via wi-fi. I say, good move Google - I love you baby.

    --
    check out my music biatches. www.seanduffymusic.com
  11. Meanwhile by dummyname12 · · Score: 3, Interesting

    Major Time Warner shareholder Carl Icahn is calling this a "disastrous" decision.

    1. Re:Meanwhile by ewe2 · · Score: 3, Interesting

      No shit and here's why:

      Icahn, who has said he is waging an "all-out proxy battle" to force Time Warner to step up asset sales and streamline, cited a recent report by Goldman Sachs that argued that Google may not be the best long-term partner for America Online.

      This wouldn't be the same Goldman Sachs locked out by Google during its IPO, wouldn't it? Nothing to see here, just a couple of vested interests having a whine.

      --
      insecurity asks the wrong question irritation gives the wrong answer
  12. Surprised they don't see what they are doing... by nemmi · · Score: 3, Interesting

    It is just a matter of time before the advertisers that use Google say "enough." They are having channel conflict now at every move they make. This infusion puts them in serious jeopardy of losing major advertising dollars by directly and indirectly competing with their sponsors. They are no longer agnostic to service providers with this move: 1) ISP 2) VoIP 3) Cable TV 4) Communications Carrier Networks

    I would be willing to wager that this has serious implications to their bottom line.

    The air in here is getting pretty brown, and with that, we will see a new google come in and take some market share. There was a reason we all started using google after the likes of infoseek and other good search engines back in the day went south due to poor management vision, index spamming and advertising revenue crater. They are not learning from the mistakes of their predecessors. My recommendation to Larry and Sergey: Sell some stock now.

  13. What was this, pigheadedness? by Stan+Vassilev · · Score: 2, Interesting

    Before MS announced its interest in AOL, Google was nowhere near interested in an AOL deal (or so it seemed).
    Now, just because MS wanted it, Google got it first.

    Sometimes businesses are silly as they can possibly get. Remember the rush of everyone providing 1GB or better storage in their mail boxes in responce to Gmail? As if we all just die for a GB of storage we won't use cuz Google 'invented' it.

    Now Google has fallen pray to the same game. I hope they play their cards well. But really I think instead of turning AOL into the Google ISP, they'll turn Google into the AOL Search Engine.

  14. Doesn't AOL = Time Warner? by retro128 · · Score: 2, Interesting

    With all the dark fiber purchases and rumblings I'm hearing about Google regarding streaming video, is it possible that the AOL buy is ultimately to get access to Time Warner's network?

    --
    -R
    1. Re:Doesn't AOL = Time Warner? by Anonymous Coward · · Score: 1, Interesting

      Yeah, that's the bizarre part for me, but I did notice an article somewhere a few weeks ago about Time Warner Telecom having a big part of google's fiber plans. TWTC is a completely different company than TWC, similar only in name, so I really do wonder what's going on here.

      However, some re-thinking of revenue streams for all the TW children companies would make sense here. Think about Google Video and TW Cable's "Everything on demand" efforts, all the print/publishing, music, etc content to be indexed. A TW/Google partnership makes a whole lot more sense than the AOL partnership to me at least, I could never figure out how the TW content fit into the AOL infrastructure, its damn near impossible to find what you want/need through their client. In addition to being hard to find, there's so much of it, it only adds to that headache. Yes, much more sense for TW/Google than AOL/TW.

  15. what? by tomstdenis · · Score: 2, Interesting

    It takes a billion dollars to make two companies agree to open up their IM clients? ...

    I wonder what it takes to get two to agree on anti-spam or anti-phish techniques...

    Tom

    --
    Someday, I'll have a real sig.
  16. GOOG by Douglas+Simmons · · Score: 4, Interesting

    Thanks for the insight. AOL's edge is their dominance on the instant message market and to have access to that is worth every penny when the alternative is swimming uphill offering what may be a better protocol but few will take to it because their chief concern is whether or not they'll be able to message their old friends. This market gives itself a natural monopoloy. So google's grabbing it and expanding it in all sorts of directions but the direction of which I am most curious is their stock: Is Google still a buy at $430?

  17. Do no evil = worlds best business model by johnnyk427 · · Score: 2, Interesting

    The reason google is such a fantastic company is because time and time again they will find a niche in the industry where consumers are getting screwed (by greedy corporations, a lack of competition, or all the corporation agreeing to just settle on a crap implementation and not bother updating it), and then just knock everybody's socks off by creating a service so far superior it makes your head spin:

    Google Search Engine - remember search engines before Google? Crammed and cluttered with ads, and nearly useless search results. Top result for a search for "cars" in Infoseek was someone in a message board talking about cars, but there were plenty of ads in every direction! Google was the first company to put the consumer first here and bring some intelligence to the information on the web.

    Google Mail - Yahoo Mail was giving us 5mb, Hotmail I think 2MB?!? Insulting. Google comes along and drops a gig for everybody, plus a far superior interface compared to the decade-old interface of Yahoo and Hotmail. Of course Yahoo and Hotmail up their mailbox sizes in response (why werent they doing this before? it obviously wasnt a problem for them because Yahoo and MS were both content screwing the customer)

    Google Talk - it looks like Google will finally be the one to unite the IM programs - this would never happen on its own, because the current players are perfectly fine with screwing their users because it helps their short-term gain. Can you imagine if phone companies were the same way, you couldn't call someone unless you subscribed to their service? The state of IMs is absolutely insulting to consumers right now and I'm rather ecstatic that Google has got their hands in it and is finally going to set things straight.

    Google has got to be the first company I've ever heard of that counts on the intelligence of customers, looks past immediate gains they might get by pandering to their customers, and is very hugely rewarded for it (in terms of a skyrocketed stock price).

    Don't get me wrong, I try to be cynical about corporations but Google is just making it too difficult!!

  18. They just failed big time.. by Sait-kun · · Score: 2, Interesting

    "as part of an enhanced pact where Google will move beyond text-based advertising to allow AOL to sell graphical ads to Google's fast-growing ad network." There they just made the biggest mistake they could have made... Currently the only advertisement I don't block is from google because they are simple text adds they are also the only advertisements I've ever clicked out of interest on something they offered. If they are going to add annoying graphical banner adds they will go where the rest of the annoying graphical adds go.. exactly the block list. I really hope they reconsider this am sure they will lose A lot of revenue if they implant this.

  19. good--this settles the argument by recharged95 · · Score: 2, Interesting
    This should snuff out all the ideologues that google is a public business-out to make a profit of course.

    They've successfully fool M$ with their do no evil marketing strategy. Ah yes, Typical Art of War: do not look threatening to your competitors, then when the time is right, wack'em unless your competitors fail from fear, over-protectiveness, and anxiety.

    This deal is actually good for Google. AOL has such as wide reach--an internationally reach that only Microsoft can match. It's fits to mission #1 of Google.: to make information available to all users, you need a network/system that allows one to easily connect. That's compared to word-of-mouth strategies. And AOL fits nicely. Good business move I say.

    Just as long as google supplies the results I want, at the price point (free to semi free) more power to them. So to the nay-sayers, really, only time will tell.

    They should name the AOL version of Google, Aogoogle...

  20. Universal User Identifier by Nurgled · · Score: 2, Interesting

    EMail addresses and IM addresses will never be identical without some layer of abstraction, because both expose some of the mechanics of how the messages are routed. In order for my Jabber ID to be the same as my email address, I must either manage my own domain -- which isn't an option for most people at this point -- or use the same provider for my email and my Jabber services. A user can choose to set things up this way for his own email address and Jabber ID, but no-one will ever be able to make the assumption that the two will always be identical.

    Now what would be useful is some kind of service (decentralised, naturally) which gives every user a single identifier which can then be used to look up a user's Jabber ID or email address (or a webblog URL, telephone number...). Could even just use DNS for this with a few new RR types. People would probably want to do it in an authenticated manner though, so that they can control the distribution of their contact details; I guess things like LID can be used for this in theory. LID uses URLs as the universal identifier. Not much use until it gains critical mass, though.