Google Gives a Cool Billion for AOL Stake

Get ready for more colorful graphics on Google pages. That may be one of the most visible outcomes of a deal between the king of search engines and America Online.

AOL announced Tuesday that it has thrown its lot in with Google, which is investing $1 billion for a 5 percent interest in the venerable ISP and content provider, apparently putting yet another roadblock in the way of Microsoft’s aggressive plans in the entire search engine arena.

The move makes Google the only shareholder in AOL other than Time Warner. “Time Warner will retain management control and full strategic flexibility over AOL, while Google will have certain customary minority shareholder rights, including those associated with any future sale or public offering of AOL,” said a statement released by the Dulles, Va.-based AOL.

So what does a billion dollars buy these days? Under the terms of the deal, Google will continue to provide search technology to AOL for one thing, thus freezing Microsoft out of that channel.

On a more detailed level, however, it also involves the two companies in creating an AOL Marketplace by “white labeling” Google's advertising technology, thus letting AOL sell search advertising directly to advertisers on AOL-owned properties, AOL’s statement said.

Also part of the agreement: expanding the use of display advertising throughout Google’s properties and making AOL content more easily accessible to Google’s Web crawlers. Furthermore, the two companies will collaborate on video search and on letting Google Talk and AIM instant messaging users communicate with each other.

“[This] agreement leverages technologies from both companies to connect Google users worldwide to a wealth of new content,” Eric Schmidt, CEO of Mountain View, Calif.-based Google, said in a statement. AOL’s branded products include the AOL service and Web site, as well as AIM, MapQuest, Moviefone, Netscape, CompuServe and ICQ services.

“The AOL-Google deal shows that Microsoft faces plenty of competition and long-term dominance is by no means assured,” commented Jupiter Research senior analyst Joe Wilcox on his blog. “No doubt, the AOL-Google deal is a blow to Microsoft. A Microsoft deal could have snatched AOL from Google as the default engine.”

About the Author

Stuart J. Johnston has covered technology, especially Microsoft, since February 1988 for InfoWorld, Computerworld, Information Week, and PC World, as well as for Enterprise Developer, XML & Web Services, and .NET magazines.


  • Microsoft Publishes Windows Deadlines on Upgrading to SHA-2

    Microsoft on Friday described its 2019 timeline for when it will start distrusting Secure Hash Algorithm-1 (SHA-1) in supported Windows systems, as well as in the Windows Server Update Services 3.0 Service Pack 2 management product.

  • Performing a Storage Refresh on Windows Server 2016, Part 1

    To spruce up some aging lab hardware, Brien decided to make the jump to all-flash storage. Here's a walk-through of the first half of the process.

  • Datacenters Are Cooling Down as Buildouts Heat Up

    Tech giants Google, Apple and others are expanding their datacenter footprints at a rapid rate, and it's pushing the industry to find better ways to power all that infrastructure.

  • Vendors Issue Patches for Linux Container Runtime Flaw Enabling Host Attacks

    This week, the National Institute of Standards and Technology (NIST) described a high-risk security vulnerability (CVE-2019-5736) for organizations using containers that could lead to compromised host systems.

comments powered by Disqus

Office 365 Watch

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.