Time Warner’s chairman says AOL is not up for purchase or partnership, but if it were, one of Microsoft, Google, or Yahoo could make an AOL deal work.
Now that Richard Parsons has told everyone AOL presents greater value to Time Warner with its potential than with its attractiveness as a takeover target, it looks like the Microsoft-AOL talks didn’t go as far as the New York Post originally hinted. Out of the three big search engines, each could work with AOL, but in different ways.
Microsoft would benefit from AOL content. It has been rapidly developing an in-house advertising network for MSN Search. A Microsoft-AOL partnership could replace Google’s search and ads on AOL’s audience-driven presence.
Redmond certainly has the money to work a deal, too. All those OEM PCs that ship to enterprises with MSN as the default site on Internet Explorer could be changed to point to AOL instead. More compelling AOL content could drive revenue to the pair and make MSN Advertising a powerhouse.
Yahoo’s expanding focus on entertainment, coupled with an existing advertising network, seems to make a potential AOL-Yahoo coupling a complementary deal. Yahoo search and contextual advertising could replace the Google equivalents on AOL.
Both companies have been working to extend the reach of their services to mobile platforms. Cooperation makes more sense than competition here. And the similar focuses on entertainment as the primary draw could either work in their favor, or dramatically conflict as Hollywood-sized personalities and egos clash.
Then there’s Google and AOL. This is a partnership where Google would gain a lot more than AOL in a deal. Google may become ubiquitous to wireless users if the hotly-rumored plans of a Google network begin to yield Wi-Fi hotspots everywhere.
But once Google gets people to login and use Google search, Gmail, and Talk, there isn’t much reason for users to stay on Google’s servers. Content breeds stickiness for portals; it’s why Yahoo and AOL keep users inside their networks, getting numerous ad impressions, for hours per user.
Google has the existing relationship in terms of search and advertising. The proposed Google network can push a lot of content, but it has to get that product from somewhere. AOL and Time Warner have that kind of video content, and a Google-AOL partnership seems to make the most sense today.
Tomorrow, who knows.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
