Google could try to bid for America Online to pre-empt a Microsoft takeover and protect the $380 million in revenue Google gets from its biggest partner, according to an analyst.
"We believe it is entirely possible that Google could consider making a bid for AOL as well," Lauren Rich Fine, an analyst at Merrill Lynch, wrote in a Friday report on the implications of an AOL-Microsoft Network deal. "This would certainly protect Google's revenues from AOL as well as enable Google to keep 100 percent of the search advertising revenues as well as gain a significant amount of content."
The New York Times reported on Thursday that Microsoft was in talks with AOL's parent Time Warner on merging AOL with MSN and other options as a way to counter the serious competitive threat Google poses in the portal and search market.
The Wall Street Journal has reported that AOL may be considering switching its search engine from Google to MSN, which could cut Google's earnings per share by between 5 percent and 10 percent, the report said. AOL generated about 12 percent of Google's revenues in 2004, or $382 million.
Google began providing search services for AOL in 2002, replacing Overture, which was acquired by Yahoo. In 2003, Google and AOL broadened their agreement. Google pays AOL every time someone clicks on one of its sponsored links and lets advertisers bid for the AOL search result placements for specific keywords users enter.
Google declined to comment. (Google representatives have instituted a policy of not talking with CNET News.com reporters until July 2006 in response to privacy issues raised by a previous story.)
A Time Warner representative declined to comment, and an AOL representative did not immediately return a call seeking comment.
They already have an established strong strategic partnership. GOOG raised the equity capital precisely to defend its existing competitive advantage and revenue streams (along with exploiting new opportunities as they arise). From AOL's POV, one must wonder what on earth they'd want with MSN search, and destroy their existing revenue stream from GOOG? One suspects that even MSFT well knows that GOOG has them beat on search; and, contrary to popular opinion, will not seriously invest much more in their ISP-related services like search. One might think that MSFT has bigger goods in their sites now, some outfit that better compliments their security drive like SYMC.
It makes me mad how none of your stories contain a response from Google. It makes me read another sites news, which is troubling because I've been reading News.com for awhile now.
Web giant is spending $120 million to beef up its Mountain View, Calif., headquarters, according to filings with the city reviewed by the San Jose Mercury News.
The Samsung Galaxy Mini 2 S6500 could make its debut at the Mobile World Congress in Barcelona later this month, according to a leaked promotional image.
MIT creates a simulation to celebrate the 50th anniversary of Spacewar. A relic of the early days of minicomputers, it was one of the first computer video games and set the stage for many others, including Asteroids.
it is childish.
when they grow up then they will command more respect... currently they are just children trying to play in a grown-up world.