In AOL
sweepstakes underway, it appears MSN may be the winner over Google.
AOL on the block?
The problem for AOL, of course, is the continually decreasing use of dial-up modems as a method to access the Internet. This number decreases gradually as DSL systems and access to cable Internet became more popular. The resulting struggles at AOL have an interesting impact on the search engine wars.
Google and MSN are trying to position themselves to dominate online search. The
situation is summarized as follows: Google is king, MSN wants this. This
becomes particularly interesting impact when one considers that Google now
supplies ads and search results to AOL. In doing so, Google gets about 10
percent of its revenues from the AOL relationship.The problem for AOL, of course, is the continually decreasing use of dial-up modems as a method to access the Internet. This number decreases gradually as DSL systems and access to cable Internet became more popular. The resulting struggles at AOL have an interesting impact on the search engine wars.
In the summer of 2005, rumors began that AOL was for sale. MSN and Google were obvious buyers. The only problem was both companies realized AOL was a good short term play, but terrible in the long term given the death of dial-up modem systems. Would Google let MSN swipe 10 percent of your business? If so, how high could Google drive up the price of AOL for MSN?
Google makes big mistake
If the rumors are to be believed, MSN and Time Warner have reached an agreement on the AOL platform.
So how much will MSN pay Time Warner for AOL?
In late December 2005, MSN and Time Warner are expected to announce a partnership in which the two companies intertwine their Internet units and pursue joint advertising efforts. In turn, Google will be expelled all AOL listings, to be replaced by MSN or AOL-MSN mix of search results and ads.
Google executives are making a big mistake, a critical error. Google will lose 10 percent of its business to MSN MSN without being required to spend resources for the company. The Google AdWords program, the main source of revenue for Google, will no longer be on AOL. Certainly, Google could find something more attractive to AOL or at least forced MSN to pay a large sum for the acquisition. How could lose 10 percent of their business without MSN pay for it?
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