The Craziest Thing About The Google/AOL deal
Posted 16 December 2005 - 05:14 PM
This sets a very dangerous precedent where bigtime adsense players can say increase my rankings too or i'm switching to yahoo ads.
Posted 16 December 2005 - 05:47 PM
It also appeared AOL kept a large % of revenues...but it wasn't specific through the financials.
It would be expected that they would work a special deal based on volume and AOL would retain better share of revenues than the average Adsense client.
With that deal google keeps those revenues from migrating to MSN.
Meanwhile I'd bet that larger adwo0rds ads will result in larger revenues for google...and I'll bet higher competition for placement...all of which will make up for the higher % of revenues they give to AOL.
One thing about G on the web...they have managed to stay steps ahead of MSN every step of the way so far.
Posted 16 December 2005 - 08:34 PM
The deal also includes the promotion of AOL content through Google's paid search.
What is interesting is that besides paying twice the market value for a 5% sharehold, Google is giving so much control to AOL:
Under the proposed new deal, AOL will be able to sell the search ads too, plugging a gap in its offerings to advertisers. In addition, AOL will sell display ads on both the AOL and Google internet properties.
It's nice to have some news from the non-SEO world though. Here we are considering Google to be the modern giant, and there the giant is brought to its knees.
Posted 17 December 2005 - 10:26 AM
John Battelle is cited as mentioning that the G/AOL agreement and its components "...each of them represents a step closer to a slippery slope".
Evidently some part of this agreement infers that AOL content will be incorporated into google rankings. Per the article, MSN balked at this element of the negotiations.
The article referenced many other elements of the negotiations, which went down to the wire with both G and MSN reps at Time-Warner Hdqtrs.
Toward the end of the article it mentions that expected G revenues from AOL ads should be about $500 million with $430 million reverting to AOL. That is a much higher ratio of revenues returned to the host than Adsense.
Finally a fund manager pointed out 2 points on the transaction.
$1 billion is chump change to Google and it "makes life difficult for MSN"
From a search perspective it may well tend to distort google's algos to better reflect and better rank AOL content. BE AWARE!!!
Secondly I suspect that the larger adwords fonts will increase google revenues very quickly...especially in the midst of the Christmas season.
Posted 17 December 2005 - 10:47 AM
Posted 17 December 2005 - 11:15 AM
Firefox is behind IE. They could easily benefit from more exposure through G.
AOL is losing dialup subscribers as broadband becomes more popular. They could really benefit from being tied into G's investment in dark cable, internet through powerlines, mobile phone integration and Voip.
Once you toss these 3 together, you have something very interesting going on.
Meanwhile of course, google maintains hundreds of millions of dollars of revenue coming in and keeps MSN out....
....A billion dollars spent here will cost MSN easily twice that as they (MSN) are stuck behind the ball...
It all sort of reminds me of the cold war as the US outspent the USSR....
"Mr. Gates Open (source) that Window!"
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