AOL & Google are reportedy in negotiations whereby AOL would be able to sell additional ads for its search engine also powered by Google on top of those provided by Google, according to a WSJ report. Google also could promote AOL Web sites among sponsored links in search results. This follows the reported agreement beween Microsoft and AOL - these two would have combined their advertising forces to form a massive global advertising network, selling multimedia, brand- and search-related ads for their own Web sites and third-party sites on the Internet. The MSFT- AOL deal also would have included joint promotions and content-sharing between the sites. Now comes the news that AOL may continue to prefer Google in place of Microsoft.Google derives as much as 10 percent of its advertising revenue and traffic from its partnership with AOL through sponsored listings within its search engine. And although that percentage has dropped from 12 percent a year ago and will likely continue to fall, the estimated $400 million in revenue isn't likely easy for Google to give up.
The reported Google-AOL deal would give AOL a valuation of $20 billion.the deal goes through, Google will retain its search relationship with AOL, as well as its revenue source, and stave off Microsoft in its quest to acquire AOL as a partner. As I covered earlier ,Google may be raising money as a cheap insurance policy against some later day when Wall Street might not be so enamored of the giant search company. Google may not go after big acquisitions but will roll-out incremental products at a blinding pace. Rapid development is an important key to market dominance. That pace of technical development, which probably isn't sustainable for long at any company, isn't possible at all at more mature companies like AOL, Yahoo, and especially Microsoft. Google’s plans are not clear – including the rumoured dark fiber, data center etc. Google needs ever more bandwidth, sure, so dark fiber makes sense to buy when it is probably as cheap as it is ever going to get. It will take the company another five years just to mature the businesses they already have . I also coered in the post Google tea leaves may not be fresh or all that green. Its also time that Google clearly explains its vision that it is executing for the next 2-3 years – very important that there should be a plan to grow and sustain the 100+Billion USD marketcap (incidentally bigger than the GDP of some oil producing Asian nations – the likes of Indonesia.) contrarian views about Google’s valuations definitely need a closer examination. I think this issue needs some serious evaluation as I had been pointing out for sometime like here, here about google's ability to sustain its leadership and support the very high marketcap. Google has to come out in the open about its plans for spending the money say building its own Internet,online index,along with monetizing models in more specific terms. Its time that we get to see and know things beyond the likes of generic macro views like that of George Colony, which focusses only on what and not the how.I would like to let's say hear Google's vision of Web 2.0 or even beyond.Like in any other industry the responsibility of pioneers and leaders are lot more than just looking after themselves - they are trendsetters and rolemodels in the industry.
Category :Emerging Trends, Google +AOL