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Google Wins The Battle For AOL

It seemed like Microsoft had a take care of AOL to exchange Google because the AOL search engine of file and supplier of online promoting services. This seemed like a incredible coup for Microsoft — one that will make them a critical Google competitor on the search engine and online promoting entrance.

However that deal fell aside final week and culminated in a cellphone name on December 16 wherein AOL instructed Microsoft the deal was off.

Google sweetened their supply and AOL went for it. Underneath the brand new deal, Google pays $1 billion for five% of AOL — about twice the market worth — and can proceed to share promoting income with AOL aol.com login.

The stakes could not have been a lot larger for each firms. AOL accounts for about 11% of Google’s income, and to have misplaced to Microsoft would have meant a big shift within the search engine wars. Microsoft would have gained in a single day credibility for each its search and promoting services.

On the AOL facet, this deal stems latest criticism that the company is floundering with nowhere to go. Not solely does this characterize a re-valuation of AOL, however bolsters its efforts to diversify its services and transfer in the direction of being one thing aside from only a glorified ISP. As an illustration, Google has dedicated to selling AOL’s services in sponsored hyperlinks, together with a beneficial assortment of online movies which have been languishing.

As for Microsoft, it’s again to the drawing board. Time will inform whether or not the AOL deal helps or hurts Google. However within the meantime Gates and company have been successfully blocked from utilizing AOL to assist them lower Google right down to measurement.

==>Microsoft engaged on one other deal?

In the meantime, in a basic Microsoft transfer, the company let or not it’s recognized they’re in discussions with one other “tier 1 web company” to type an alliance to counter the Google/AOL deal.

In his weblog, Ian McAllister, an MSN program supervisor wrote, “On the finish of the dialogue one of many folks I used to be assembly with threw out a blanket supply to brainstorm different methods wherein our firms may work collectively,” McAllister wrote within the weblog posting “He then said that his company was prepared to entertain concepts for working with Microsoft that will assist our search and/or promoting enterprise, with one of many targets being to stop Google from dominating these areas much more than they’re now.”

No one is saying who this different company is, and what they will carry to the desk. Yahoo has been talked about, however that’s unlikely since they’ve little to achieve from serving to Microsoft win market share in an space wherein they’re so lively.

Some trade analysts assume it’s probably the opposite company is a big high-speed Web connectivity supplier equivalent to Comcast or AT&T Inc. Joe Wilcox, senior analyst with Jupiter Analysis suggests that is the logical transfer for Microsoft. “Microsoft will surely profit if say a Comcast or another broadband suppliers with fashionable portals selected MSN because the default search,” based on Wilcox.

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