By now, most people in the search engine biz know about Microsoft’s discussions with Time Warner over the future of AOL. In the original article by the New York Post, the newspaper also mentioned both Time Warner had talked to both Google and Yahoo but Microsoft was their primary choice.
Ever since that Post article, the eBusiness news business has been running rampant with speculation and playing that notorious game called simply, “What If?”
So let’s play “What if?” Jim Hedger over Search Engine Guide had a good editorial today discussing this very topic. He mentioned the fact the AOL has been a colossal letdown since Time Warner bought them over five years ago and how the deal, intended to help infuse the Time Warner stock value did anything but.
What’s most interesting about the speculation between Microsoft and Google is the fact that in many ways, AOL would offer both companies different features to expand. Google, by far would gain the most, no question. While Google is absolute master at pure search, they generally are lacking incredibly in most other areas keeping people on their site. AOL would provide that in droves. AOL and Google already have a working relationship so it wouldn’t be that hard to envision. Plus, it can be expected Google would drop it’s Google talk and certain other features in lieu of what AOL would bring to the table, namely the IM and some other youth orient features. AOL currently utilizes Google for its search tools from many of its pages. Losing that would hurt, badly.
Microsoft would also gain heavily. The biggest help would be the hurt placed on Google though. If Google were to lose the AOL account because it accounted for over 11% of their revenues, that would leave Google in excruciating pain. MSN would also pick up many of the multimedia features AOL offers to add to the MSN lot plus the Netscape stuff (HAH!) and Hedger mentioned ICQ, CompuServe and AIM users. That’s a lot of add-ons for Microsoft. Combine that with the nearly 22 million AOL users and it makes a powerful matchup.
The problem is Microsoft does have some baggage, more than Google, in the form of MSNBC. Google has a 50% share with the NBC network and a deal with Time Warner would certainly hurt that affiliation. Also, the battle over the instant messenger would be waged as well because Microsoft already has their own IM system.
These are just a few of the complex questions to deal with in the upcoming dealings. Where it goes now is up in the air but as things progress, one thing’s for sure: Time Warner is trying to lift up the pressure of AOL and in so doing hopes to drive up stock prices so it’s safe to say that whoever gets it, Time Warner is getting anxious.
John Stith is a staff writer for Murdok covering technology and business.
