Google buys 5% of AOL

December 16, 2005 2:22 PM

Google buys a 5% stake in AOL.For ... one billion dollars.
posted by Tlogmer (49 comments total)

Story at SearchEngineWatch
posted by Tlogmer at 2:24 PM on December 16, 2005

Google, which prides itself on the purity of its search results, agreed to give favored placement to content from AOL throughout its site, something it has never done before.

...
posted by nitsuj at 2:31 PM on December 16, 2005

Google == borg. Oh well.
posted by delmoi at 2:32 PM on December 16, 2005

Is google evil now?
posted by phrontist at 2:33 PM on December 16, 2005

No, now it's "safer and more fun"
posted by Bighappyfunhouse at 2:34 PM on December 16, 2005

Oh, no... Anyone got a good search engine in the works?
posted by brundlefly at 2:34 PM on December 16, 2005

Oh, they also launched google music.
posted by delmoi at 2:36 PM on December 16, 2005

And so Google jumps the shark.
posted by xmutex at 2:39 PM on December 16, 2005

I find it very difficult to believe that AOL is worth $20 billion.
posted by crunchland at 2:40 PM on December 16, 2005

that's 1 billion in thrown-out money. And AOL is evil (and censoring).
posted by amberglow at 2:42 PM on December 16, 2005

i thought google was supposed to be some repository of super-genius. did no one consider the PR implications of this? i find it hard to believe that their "do no evil" edict is worth *that* little, monetarily, or that this is even a good investment in the first place.

i mean: WTF?

[this is weak.]
posted by spiderwire at 2:49 PM on December 16, 2005

So basically google just spent $1 billion to stop AOL and Microsoft launching joint ventures.
posted by bap98189 at 2:50 PM on December 16, 2005

Google, which prides itself on the purity of its search results, agreed to give favored placement to content from AOL throughout its site, something it has never done before.

This has to be in reference to sponsored listings. I can't see how it would benefit Google to risk impairing their own natural listings. Favored placement for AOL content could drag down the relevance of search results, which is exactly what Google tries to avoid.

If they're giving AOL favored placement in their sponsored listings, no big deal. AOL will start selling sponsored placements, and Google will start using them throughout their network. And none of this will matter to anyone except search advertisers, who will now just have another place to spend their money.
posted by sellout at 2:51 PM on December 16, 2005

Yeah, it's sponsored listings. No way in hell google would put AOL ads in the main listings.
posted by Tlogmer at 2:53 PM on December 16, 2005

I'd pay $1b for all of AO, maybe. But that much for only 5%? I don't think so.
posted by tommasz at 2:58 PM on December 16, 2005

I'm having a terrifying (but strangely arousing) vision of Google assimilating AOL and rebranding/re-tooling/re-organizing their ISP services, web browser, and IM client.
posted by kryptondog at 3:09 PM on December 16, 2005

There are still tens of millions of people shelling out $20/month for AOL dialup and so it does get eyeballs that advertisers covet. I don't understand why. My prediction in 1995 when AOL had 4 million subscribers that it would soon go out of business in 5 years. Instead it was able to buy Time Warner.

I think bap98189 hit the mark in this is just money to stop Microsoft (and Yahoo) from hooking up with AOL.
posted by birdherder at 3:12 PM on December 16, 2005

Its considered sporting by the digerati to poop on AOL, but slowly and quietly, AOL has been retooling into quiet the profitable web portal, independent of the dial-up subscriber base.

In fact, much to the consternation of all the monday morning quarterbacks who called the AOL-Time Warner merger 'the worst', AOL is starting to appear like the strongest part of the Time Warner empire. They are selling it off because its worth so much money now, not because it's a white elephant.

Google is an advertising company. AOL is a place to advertise. Surprise, they want to get in bed together.

(Maybe have half good, half evil little children, like that bad movie from the 80's, you know the one)
posted by PissOnYourParade at 3:15 PM on December 16, 2005

Google, which prides itself on the purity of its search results, agreed to give favored placement to content from AOL throughout its site, something it has never done before

It doesn't sounds like sponsored listings to me. It may be that I search for "Depeche Mode" and the first result, perhaps set off by some sort of descriptor, says "See Depeche Mode Videos at AOL VIDEO"

And, besides, what sponsored listings would AOL be doing? Advertising what, exactly, on Google's site? Furthermore, it clearly says "something it has never done before", and sponsored listings have been tied to overall Google deals in the past.
posted by cell divide at 3:15 PM on December 16, 2005

I want to start a company and sell it for millions to google. Someone teach me php.
posted by craniac at 3:40 PM on December 16, 2005

AOL's sales staff would also sell display ads across Google's network of Web publishers.

AdSense, now. That's interesting.
posted by dhartung at 3:44 PM on December 16, 2005

cell divide:

And, besides, what sponsored listings would AOL be doing? Advertising what, exactly, on Google's site?

It sounds to me like AOL will be opening up their own sponsored listings program. AOL Search shows Google Adwords paid listings, and this appears to be a step towards independence from that. AskJeeves was in a similar position and created their own sponsored listings program -- they now run Google ads while giving preferred placement to their own customers.

So, any advertiser could create an account and run paid listings on AOL Search without having to go through Google to do so. Advertising anything at all, through any keywords they like.

This is something that has never been done before because Google is the provider for paid listings to so many other search engines and publishers. For the first time, Google will be a publisher for another sponsored listings program. Check out Bruce Clay's search engine relationship chart. All yellow arrows on the top half point away from Google. With this new deal, there will also be a yellow arrow pointing from AOL to Google. As far as I know, this has never been done before.

Of course, I could be misinterpreting all of this, and Google might actually have sold its soul. God forbid.
posted by sellout at 3:45 PM on December 16, 2005

Having copyrighted the acronym 'asl', I now look forward to seeing Google's AdWords in AIM.
posted by V. at 4:06 PM on December 16, 2005

Yahoo ended talks with AOL just this week, disagreeing over the price. Google has deeper pockets, apparently.

You have to realise that the search engine is completely secondary to the eyeballs they get. Both Google and Yahoo! get respectively all and most of their money from ads. That's a lot of ads, and a lot of money. The search engines, the cool tools are there for just one reason: attract people so they look at the ads. That's all.

Signing a deal with AOL means millions more will see them, and the beancounters figured that was worth way more than losing a little reputation amongst the geeks. Which is very probably true. Face it, the people who will be bothered by the deal are by nature very vocal on the Web, but they aren't much in cash volume when your potential customers are more or less everybody online.

The only drawback I could see is that when geeks actually get over the Google-is-nice propaganda, Google will have a harder time recruiting the finest programmers. But that shouldn't be a major concern; the company won't be any ethically worse than the rest, and the job itself will remain amongst the most interesting available.

(disclaimer: I work for Y!)
posted by Spanner Nic at 4:19 PM on December 16, 2005

.
posted by NewBornHippy at 4:23 PM on December 16, 2005

GOOG-OL seeks PLEX for mutually beneficial company name. No weirdos!
posted by mr_crash_davis at 4:39 PM on December 16, 2005

Google: DO NO EVIL, CITIZENS. WE'RE WATCHING YOU.
posted by Smart Dalek at 4:47 PM on December 16, 2005

This is good for Google. They're getting their advertising hands on the big, fat slow-moving target that is America Online's userbase. The marketing equivalent of looking at fish in a barrel.

The only drawback I could see is that when geeks actually get over the Google-is-nice propaganda, Google will have a harder time recruiting the finest programmers

Yeah, who would want to work for a company that pays you to work on your own private projects, feeds you for free, is involved with some of the most cutting edge research in the world, has a massive data set you get to play with, and has a stock price of 430 bucks a share.

You'd have to be fucking nuts!

(disclaimer: I work for Y!)

Ahh, now I see...
posted by SweetJesus at 4:56 PM on December 16, 2005

Subscriptionless link.
posted by poorlydrawnplato at 4:57 PM on December 16, 2005

Oh, didn't read the whole post. My bad
posted by poorlydrawnplato at 4:57 PM on December 16, 2005

i don't see this as horribly wrong, but i sort of hoped google was above this sort of marketplace chess and maneuvering. :T
posted by Tryptophan-5ht at 4:57 PM on December 16, 2005

Hey, if this means AOL users will click more on my animated Shopzilla Flash leaderboards, I guess I'm happy.
posted by brownpau at 5:00 PM on December 16, 2005

Google buys 5% of AOL? Sounds good to me.
If AOL bought 5% of Google? That's be awfull.
Seems like much 'doo 'bout nothing.
posted by Richard Daly at 6:13 PM on December 16, 2005

Respectfully, SweetJesus, have you read the end of the sentence, or did the red veil blind you before that? Google's perks are nice, but not unique, and to the calibre of programmers they hire, the interest of the job and company trumps the advantages anytime.
posted by Spanner Nic at 6:27 PM on December 16, 2005

I hope Google is 100% sure that they will never sell their stake in AOL, because the AOL cancellations department is going to make it practically impossible to sell their stake.
posted by gyc at 7:10 PM on December 16, 2005

Google's perks are nice, but not unique, and to the caliber of programmers they hire, the interest of the job and company trumps the advantages anytime.

I dunno, there just seems to be some cognitive dissidence in your feelings about Google. On one hand you say that the "Google-is-nice" mentality is propaganda, and because of this the company will have a hard time recruitinghigh caliber programmers. On the other-hand, you dismiss this as not mattering and say working for Google is one of the most interesting careers you can have in the industry. I'm still not understanding your first point, I guess.
posted by SweetJesus at 7:21 PM on December 16, 2005

I was under the impression that the reasoning behind Google's decision had to do with Time Warner's content archives... not an interest in AOL, per se.
posted by pruner at 7:26 PM on December 16, 2005

AOL is now 5% less evil.
posted by kindall at 7:47 PM on December 16, 2005

kryptondog: "I'm having a terrifying (but strangely arousing) vision of Google assimilating AOL and rebranding/re-tooling/re-organizing their ISP services, web browser, and IM client."

Huh. AOL does own Netscape, and Google has a big interest in Mozilla. Wouldn't that just piss Microsoft the hell off? Google influences AOL to dump Internet Explorer in favor of the better open-source based browser that they already own, years after Microsoft thinks they've finally killed it off. Now that would be rich. I'm looking forward to it...
posted by caution live frogs at 8:12 PM on December 16, 2005

Does this mean I can tell people that I do work on the side for Google?
posted by drezdn at 11:01 PM on December 16, 2005

eh. losing geek cred won't hurt their stock price much.
posted by jdfalk at 11:18 PM on December 16, 2005

isn't this like buying a stake in horse drawn carriages?! what are they thinking?
posted by BlackLeotardFront at 12:59 AM on December 17, 2005

there just seems to be some cognitive dissidence

sweet, sweet sweetjesus, i make this comment not to call you out but to help you out.

it's cognitive dissonance, my good friend. cognitive dissonance.
posted by Hat Maui at 1:00 AM on December 17, 2005

Yeah, who would want to work for a company that pays you to work on your own private projects, feeds you for free, is involved with some of the most cutting edge research in the world, has a massive data set you get to play with, and has a stock price of 430 bucks a share.

But don't forget, you must be a graduate of Stanford. They hate them Berkeley boys, and if you've learned what you know on your own, well, you're worthless to them. Google is just a massive Stanford frathouse.
posted by nlindstrom at 9:40 AM on December 17, 2005

cognitive dissidence

revolution in my brain?
posted by tiamat at 9:40 AM on December 17, 2005

If Google owns part of AOL, how do they get any money? They won't get paid for ads from what's part of their own business, no? House ads are freebies, aren't they?
posted by amberglow at 10:41 AM on December 17, 2005

(like when you see an ad for one TimeWarner mag in another TimeWarner mag)
posted by amberglow at 10:41 AM on December 17, 2005

House ads are freebies, aren't they?
Ah, it works like that: advertisers, which can be anybody with a website, buy a set of keywords for a given amount. When a surfer type these keywords into the relevant search engine, or they are calculated from the content of the page he is watching, the ad is displayed. When a surfer clicks on the ad, the advertiser pays Google/Yahoo/AskJeeves/... said amount.

AOL would only display Google's ads.
posted by Spanner Nic at 6:22 PM on December 17, 2005

Let's not forget that AOL is losing 300 subscribers an hour.
posted by jikel_morten at 9:50 PM on December 17, 2005