A five percent stake in AOL could be the price the search advertising giant has to pay to keep Microsoft from moving in and becoming AOL’s partner on search and advertising.
Microsoft had a chance to really hit Google. To give them the same treatment Bernard Hopkins gave Oscar de la Hoya in September 2004, a crushing left hook in the tradition of all the great Philly fighters. The world’s biggest tech company had the opportunity to hit the dominant search advertising company with the hardest of blows, a shot to about ten percent of its revenue.
Microsoft may well have missed the shot.
Late reports from the Wall Street Journal say it’ll be Google winning the fight for a stake in AOL, by taking a five percent stake in the Time Warner division.
The deal will be worth about $1 billion. Essentially, Google will give up about three years of revenue from AOL under the current agreements in exchange for shutting Microsoft out of the running for a piece of AOL.
The Journal report covered some other details related to advertising for AOL and Google:
Google will promote AOL’s Web properties among the sponsored links in its search results, and will include AOL’s collection of online videos among its search results. Google’s arrangement to provide search technology for AOL, which was set to expire at the end of next year, would be extended for five years.
CNet News reported that AOL told Microsoft early on December 16th that the deal Microsoft expected to finalize was no longer in play.
It’s a significant setback to Microsoft. A deal with AOL could have vaulted MSN’s AdCenter, which is being tested in Singapore and France, to being a major online advertising player.
If the Google-AOL agreement goes through as reported, Microsoft’s ability to become a major online advertising player may have become a difficult, if not impossible, task.
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David Utter is a staff writer for murdok covering technology and business.
