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AOL Fight Narrows To Two Players 124

Posted by Zonk from the another-wishbone dept.
BucksCountyCycleGeek writes "Now that Yahoo! has dropped out of the race to control AOL, the field of contenders has narrowed to Microsoft and Google. While antitrust issues continue to cloud Microsoft's bid, it is getting pretty clear that AOL wants payment in cash and not Internet stock. While Google has worked with AOL in the past, Microsoft's resources dwarf them for the moment." From the CNN/Money article: "Time Warner accepted AOL's stock when the old line media company agreed in 2000 to be purchased by the Internet service provider, a deal that proved a disaster for Time Warner's stock value. Yahoo! executives also had concerns about the valuation Time Warner was seeking and possible difficulties integrating the two businesses after any deal, a person close to Yahoo! told the paper."
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AOL Fight Narrows To Two Players More

AOL Fight Narrows To Two Players

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  • Yesterday's technology (Score:5, Insightful)

    by dada21 ( 163177 ) * <adam.dada@gmail.com> on Friday November 11, 2005 @04:51PM (#14011368) Homepage Journal
    AOL seems rooted in two old-fashioned categories:

    1. "The Internet is the web," whoever makes the content wins (I call it the super BBS text file repository)

    2. "The Internet is about connecting people together through my rose-colored lenses."

    Both business markets are not ally valid anymore. Smaller ISPs seem to gain users by not making themselves visible as the middleman. The more you've noticed your ISP, the more I bet you've been frustrated.

    Creating web content is better performed by billions of people than by dozens. CmdrTaco edits an article, but people come here for the +5'd comments. CmdrTaco couldn't get many +5's on his own (maybe -1 Redundants).

    The future, to me, is how to collect all those billions of opinions and creations and make it specifically friendly to every individual user.

    Google is heading in the correct direction. I let most of my domain names lapse because of Google. Yet they're still not there yet.

    The ultimate web company has to be able to give you what you want, immediately, but also correctly give you items you need even if you didn't realize you needed them.

    *Targeted ads you really want to see.
    *Content that may be different than what you're used to, but still informative or useful to you.
    *Access to information by only knowing some vague part of it. Find that TV show from a line or two. Find that song or book the same way.
    *Compensate content creators somehow.

    AOL is none of these things. They're an online newspaper and amusement park. *Yawn* I wouldn't pay $5 for them.

    Plus, how many people "hate" the name over their junk mail and bad cancellation policy?

    As for Time Warner stock, would you want a part of Time? Warner? Maybe in 1985.

    • Re:Yesterday's technology (Score:4, Interesting)

      by HMC CS Major ( 540987 ) on Friday November 11, 2005 @04:53PM (#14011393) Homepage
      You are completely right, but a bit late...

      But, If you've done business with AOL in recent months, you know that neither of your 2 categories are going to be true for much longer.

      They're opening up, they're making many of their internal services public, and they're going to start pushing some very good content to the masses in the very near future. It's lined up. It's almost ready. It's completely new for AOL, and it's designed to completely change the mentality described in your post.
    • Fair enough, although I think you missed something. With having to pay my cable company $50/month for broadband, why would I subscribe to AOL. It made sense back in the modem days since they didn't cost any, or much, more than anyone else, but now...

      The real question is, if their business model is so bad, why are Google and Microsoft even interested? What's the point? This model obviously only worked in the dial-up age when you had a captive audience (I remember my first internet experiences with AOL
      • Here's the 10 cent easy answer. Because to 200 million americans who all have cash to spend, AOL means more to them than WWW. Now, before you all flame me, understand that I know that a) Americans are not the world, and b) the 60 million tech savvy Americans all know that AOL has no cred. But there's still alot of money in those 200 million Americans who see AOL as their ticket to perhaps getting online. To me, there's no question who I want to win this fight. There's also no question how important it
        • I suppose you are correct - but I guess it just seems like a desparate way to make a quick buck. As others have posted, AIM is a big deal and AIM users are sought after by both Google and Microsoft - which makes sense. Just seems to me it's not a long term money maker for sure and by the time both companies are merged it may not be a money maker at all.
          • I think the one thing we overlook as geeks is how UN-geeky the rest of the people out there are. All I have to do is look at my parents, inlaws, and parents of friends, etc. These are people who's computers I generally have to fix. They might not use AOL for a browser or an internet service (though that's often because of mine or my wife's advice) but they represent what people in the rest of the world use the internet for. Its not for the games. Its not for developing software, or investigating new co

    • Re:Yesterday's technology (Score:5, Interesting)

      by laughingcoyote ( 762272 ) <(moc.eticxe) (ta) (lwohtsehgrab)> on Friday November 11, 2005 @05:31PM (#14011692) Journal

      You bring up some excellent points, although I think there might be people that still want the hand-holding experience initially, I just don't think it's necessary or desirable for many, and will be for even less, as net usage becomes more and more ubiquitous.

      As to the ISP, you're dead on-I pay them to provide me a pipe and leave me alone. The only time I have to care that they exist is when that pipe ceases to work. Now, that doesn't happen often, and they're very responsive to problems, but by definition, when I'm talking to them, there's -already- something wrong.

      I don't want "targeted content" from my ISP, I don't even use their mail accounts. Fortunately, I've got a good one-they've got all the standard crap in their AUP that you're not supposed to do, but they sure don't seem to actually care if you do it. (Not that I would, of course, do any of it. Just hypothetically. Really.) This is a Good Thing (TM), both for me and for them, because harassment from them over it would be just another (unpleasant) reminder of their existence. And for me, I require basically -no- support (other then when their hardware fails), they won't support Linux anyway, so you're rather on your own if you don't want to do the Microsoft or Apple bit. In that sense, I'm the best kind of customer-I send them their check and leave them alone.

      Come to think of it, I'd sure love to see a discounted service offering like that-provider cuts the price in half, and in exchange, they support absolutely nothing except the hardware outside. Now that's sure something I'd look into, especially if it offered very high speeds and didn't (even technically) then forbid you from doing anything worthwhile with them. I'd sure also love to see some worthwhile upload speeds.

      Creating web content is better performed by billions of people than by dozens. CmdrTaco edits an article, but people come here for the +5'd comments. CmdrTaco couldn't get many +5's on his own (maybe -1 Redundants).

      By definition, the power of the net is that anyone can create content. Also by definition, a good part of that will be crap, but I've sure found a lot of gems too. Make it easier to sort the gems from the garbage, and I'll be very interested. Google's ranking system really does seem to do well at this, at least for sites that are already relatively popular, but I'd love to see more resources that gear toward more obscure content.

      For the rest-Google's actually got the targeted advertising bit down. I've got adblock right here, and I block most everything. But I leave the google ads alone. I quite often find them relevant and useful, and take me to something I might actually be interested in purchasing, but at the same time, they're quiet and unobtrusive. They don't jangle in my face, visually distract from the content I'm trying to view, or (ABSOLUTE WORST SIN, and thank goodness for flashblock) make noise.

      Different content? Absolutely. Maybe a "recommendation" system? I'm not sure how it would be implemented, but I think it could be. Although, of course, hyperlinks take us a good way there already.

      Also correct on the TV show/songs/books-although I find it's actually easy with songs if you know a line, that line along with "lyrics" usually brings it right up. TV shows sometimes have a transcript posted, so a line for them can quite often hit as well. Obviously, publishers frown on having "transcripts" of their books posted, so that's a little harder...hell, they're even trying to stop Google from doing it in a way that would benefit them immensely.

      *Compensate content creators somehow.

      You mean they're going to start PAYING me to write those +5...oh...damn. Well, it was a nice thought. In all seriousness though, most who put "content" up don't need or want paid-certainly, no one's paying me to post here, it's just something to do. I enjoy the opportunity to converse, debate, and read what others doing the same have to say, that's payment enough. As for those who do, I like the EFF's collective license model, but other ones exist too. Hopefully it'll come down to something a lot better then the current system of draconian copyright controls. I'm not holding my breath, but I am still holding out hope.

    • Dunno if I agree (Score:3, Insightful)

      by PCM2 ( 4486 )

      Smaller ISPs seem to gain users by not making themselves visible as the middleman. The more you've noticed your ISP, the more I bet you've been frustrated.

      I don't know where you live, but in my area (San Francisco) the local broadband providers are fiercely competing on the basis of add-on services. Comcast, for example, is selling streaming video of news clips, sports, music videos, etc. SBC DSL is trying more aggressively to sell on price, but they too bundle all kinds of anti-virus tools, etc.

      The pr

    • The ultimate web company has to be able to give you what you want, immediately, but also correctly give you items you need even if you didn't realize you needed them.

      *Targeted ads you really want to see.
      *Content that may be different than what you're used to, but still informative or useful to you.
      *Access to information by only knowing some vague part of it. Find that TV show from a line or two. Find that song or book the same way.
      *Compensate content creators somehow.

      ABsolutely not. Lets take it point by p

  • Two great evils even more evil together.
    • Google vs Microsoft for controlling AOL...
      It's like a cosmic battle of good versus evil to control the souls of millions.
    • IMHO, MSN+AOL=irrelevant. Who will care when you add Lame Pathetic together ?
    • I don't see what is wrong with "MS + AOL". That is the way it has been from the beginning,
      you run your AOL client on top of Microsoft Windows. Wasn't that one way to get Windows 3.1 to connect to the internet? Now if Microsoft owned AOL, perhaps the
      code could be "put together" in the same way that MSIE is a part of Windows. Then it might be
      more stable. It's pretty good right now, but probably bloated. Maybe the combo can be reduced in size. Running "AOL" on Linux? Maybe a clone will emerge that will offer t
    • On the plus side, maybe they'll finaly release that email tracking utility...

  • errp? (Score:3)

    by ottothecow ( 600101 ) on Friday November 11, 2005 @04:52PM (#14011379) Homepage
    google and aol? anyone else think thats an odd combo...and fairly frightening?

    • Re:errp? (Score:3, Funny)

      by eln ( 21727 )
      I don't know how odd of a combination it is, but if it goes through Google is going to have to change its motto.
    • Your subject, comment, and sig all end in question marks.

      Die.
    • Depends on how you look at it. Maybe AOL's service could actually become as unobtrusive as Google's services. Then again, I'd hate to have AOL anything in its current form accompanying any of Google's products. I'd be less apt to suggest Google's services to anyone if AOL software came attached.
    • Yep. If Google does buy AOL, they will instantly go from one of the coolest companies on the planet to one of the lamest. Pretty neat trick when you think about it.

      Oh well, I'm getting tired of them anyway. Their search engine sucks ass. It gives too many results and 99% of them you don't even give a shit about. It's near impossible to find the data you want anymore.
      • Oh well, I'm getting tired of them anyway. Their search engine sucks ass. It gives too many results and 99% of them you don't even give a shit about. It's near impossible to find the data you want anymore.

        Huh? I'm not a Google fanboy, but I don't think it's possible to say their search engine sucks. Care to suggest a better one?

        Maybe you should take a look at Google Operators [google.com].
    • AOL sends a lot of traffic to Google since Google provides the search results for AOL. I thought that I had read that this is noticeable chunk of revenue for Google, but looking at AOL's site, I'm not entirely sure how that works - I don't see Google Ads.

      Anyway, if Yahoo or MS/MSN bought AOL, that traffic instantly goes away. That's the reason that I've heard for Google even being interested in AOL. It's worth mentioning that Google is by no means a monopoly in search traffic. It's probably pretty c

  • AOL Bidding (Score:5, Funny)

    by Anubis350 ( 772791 ) on Friday November 11, 2005 @04:52PM (#14011383)
    M$: I want AOL
    Google: Me Too!
    • Are you implying Google is still living in their parents' cellar,
      downloadin pictures of Sarah Michelle Gellar?

    • Re:AOL Bidding (Score:5, Funny)

      by robertjw ( 728654 ) on Friday November 11, 2005 @05:08PM (#14011510) Homepage
      No doubt, they should list it on Ebay!

    • Re:AOL Bidding (Score:3, Funny)

      by IANAAC ( 692242 )
      M$: I want AOL Google: Me Too!

      More like...

      OMGLOLU2!!!?????

    • My first impression after reading the headline:

      MS: You take AOL.
      Google: No, you take it!
      MS: No, you!
      Google: You!

      We're talking about AOL here.
    • You forget that AOL still has a large user base.

      Even if the AOL name may be crap, there's a lot of ad-revenue floating in there. Between the user base (AOL Websites, AOL Messenger (big!)), there's a lot of advertising.

      Also remember that AOL (IIRC) owns Netscape. Mozilla is a spawn of Netscape, who still contributes to it's development. This is a move for Google to support more Open-source.

      • People forget that Google is an advertising company, and needs people to turn into Soylent Green and sell to their clients. Microsoft on the other hand is a software company, and since AOL users are the people to poor and/or cheap to get high speed, they sure aren't gonna go spend $400 on a legal copy of Office or an Xbox.

        In the end, Google wins with the uneducated poor people that are susceptible to advertising, or even notice ads. Microsoft has no use for them.

        But really, we're all just better off without
    • I see it this way.

      If MS buys AOL, the slashdot readers who hate MS win, because I don't think that even MS could survive that acquisition (look what it did to Time Warner). What are they thinking? Wow, now we'll have MSN AND AOL... the two most popular ISPs on the planet!

      If Google buys AOL, we can count on them FINALLY doing something evil, right? All of you "Google is evil because people want to work there" people will be able to watch Google tank from an acquisition.

      I guess that there's something for e
      • f MS buys AOL, the slashdot readers who hate MS win, because I don't think that even MS could survive that acquisition (look what it did to Time Warner). What are they thinking?

        AOL purchased TIme Warner, not the other way around.

  • Aol is a missed opportunity (Score:3, Insightful)

    by external400kdiskette ( 930221 ) on Friday November 11, 2005 @04:54PM (#14011397)
    to have a growing conglomerate ... despite still being profitable it's a dead-end for any potential buyers, the main thing they have going for them aside from their web portal stuff like AIM is a dwindling user base of 56k users when they could've been an expanding userbase of broadband users ... I guess whoever buys them gets millions of $ in profit per month but if the price is something ridiculous like several years of profit at the current rates you gotto wonder how it can be made to grow enough to justify a high price.
  • I really hope neither of them buy AOL, IMHO it would ruin their products.

    • Re:Wow.. (Score:3, Interesting)

      by Smidge204 ( 605297 )
      Google's "Product" is targeted ads (Though they do offer a handful of other services). If Google gets AIM, with millions of users, that is millions of eyeballs looking at their ads for extended periods of time. I wouldn't be surprized (but maybe a bit spooked) if they would run your messages through AdSense every so often.

      Microsoft, on the other hand, well... apart from bolstering their MSN messenger network and traffic through their web services (not a source of revenue for them, really), I can't think of
      • There's no direct benefit to Microsoft for pouring billions of dollars into their Entertainment division. The Xbox is a money pit, but they keep dumping more into it because with time, Microsoft will become an established brand in the living room. The Xbox becomes a launching point for more products and services, and then profits. Same concept here with growing MSN.
      • And remember that whoever gets AIM also gets ICQ.

        Wouldn't they get Nullsoft as well? So it could be bye-bye WinAmp if Microsoft wins, or the Google Media Player if Google wins....

        What else does AOL own?

  • AOL wants cash? (Score:3, Insightful)

    by Nerdposeur ( 910128 ) on Friday November 11, 2005 @04:57PM (#14011429) Journal
    I'm not surprised. To me, that says that AOL thinks that buying AOL is going to hurt your stock. If it were a good move, they'd want a piece of the buying company's stock, which would rise after having made such a great acquisition.

    Of course, that's not my professional opinion - I Am Not A Stock Broker.
    • The Borg Collective (a.k.a. Microsoft) and AOL make a rather good match. Look at what they have in common:

      1) Crappy, Buggy Software
      2) A User base too stupid to realize that there are better alternatives
      3) High Prices
      4) They rely more heavily on maketing than technical superiority

      OMFG, rush them to the altar and see what kind of a two-headed freak baby they produce. It should be well worth it's weight in amusement value alone!

      2 cents,

      Queen B
      • Modded as "Flamebait"?????

        Item 1 - Crappy Buggy Software - How many of you have fixed PC's that were crashing due to the AOL superfriendly software??? As for Microsoft, enough said.

        Item 2 - User base too stupid to realize that are better alternatives - Ok, maybe it's just me, but how dumb do you have to be to pay $24.95 a month for dial up? I pay $36.00 a month for a 7MB/sec fiber connection. Dial up from good reputable carriers fairly easy to come by at $9.95 a month. Furthermore, AOL is offering it's
    • Time Warner "acquired" AOL in an all-stock deal, and now has something that's only worth a fraction of the price at the merger. I can understand why the TW execs and stockholders are a little skittish about accepting stock in lieu of cash.

  • For the conspiracy theorists out there. (Score:3, Insightful)

    by rindeee ( 530084 ) on Friday November 11, 2005 @04:58PM (#14011435)
    Any chance Google is pursuing AOL just to make sure MS buys them? You know...give'em enough rope and all.
    • That's a really interesting idea. By seeming to compete for the buy, they could also drive up the price. Like bidding at an auction, then withdrawing near the end.
    • That is part of Google's strategy. If MSFT buys AOL, then MSN search will be the default. The search engine is the ad revenue generator that MSFT wants to expand. AOL has 110 million U.S. visitors a month to its Web and online properties, and AOL accounts for about 10% of the online advertising market.

      Google provides search technology to AOL and gives AOL a cut of the advertising revenue generated by those searches. AOL earned $300 million from Google search ad revenue last year.

    • It also could be the opposite... Google may bid to raise
      the price for MSFT. Microsoft already has MsNBC which has
      been a pretty poor online play. Presumably Google has their
      numbers and Microsoft their own. Now the game theorists get
      to analyze the situation and decide what to do. Is Microsoft
      bluffing? Is Google really serious about AOL? I'm guessing
      that they are serious since I remember approx 1/2 of Google's
      revenue came from wholesale search deals.. but that was a couple
      years ago. Interesting none the

  • Buying AOL may be Google's first big mistake. (Score:3, Insightful)

    by Futurepower(R) ( 558542 ) on Friday November 11, 2005 @04:59PM (#14011442) Homepage
    If someone has an AOL account, it means that they don't have a friend in the computer business, in my opinion. Local ISPs almost always give better service, and don't abuse the customer with advertisements. AOL's business depends on customer ignorance, and computer users are rapidly becoming more knowledgeable.

    I hope buying AOL is not Google's first huge mistake. Google should offer no more than $6.50 and free soft drinks.

    Recently, someone associated with Time Warner (Parsons?) has been putting out a lot of baloney about the value of AOL.

  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Friday November 11, 2005 @05:02PM (#14011469)
    Comment removed based on user account deletion

  • AIM (Score:3, Insightful)

    by eurleif ( 613257 ) on Friday November 11, 2005 @05:08PM (#14011506)
    If Google ends up owning part of AOL, I would expect them to integrate AIM with Google Talk. Imagine millions of AIM users being forcibly converted to Jabber... *drool*

    • Re:AIM (Score:1)

      by Lugae ( 88858 )
      That was my first thought, too. What scares me is that it could be a really bad investment decision for Google. More Jabber users would be great, though.
    • On the other hand ,Imagine Millions of AIM users being Forcibly converted to Jabber "dr00lz0rz"
      • No, no, no. Not dr00lz0rz, more like one great big aneurysm as the collective intelligence on the jabber network plummets.

  • AOL sucks so hard that they should sell vacuum cleaners.

    This is not a troll. It's the truth after I was "mysteriously" signed up for their dial-up and they started charging my card, even though I don't have a phone!!

  • Time Warner has mismanaged AOL (Score:4, Interesting)

    by Anonymous Coward on Friday November 11, 2005 @05:20PM (#14011609)
    I have road runner service. If you go out to the office to sign up for a cable modem, you'd never know that the same company owns AOL. They don't push it at all.

    I'm a single guy with no kids, and for me, AOL doesn't have much to offer. But I know quite a few parents with small kids who are looking for good parental controls. If Time Warner used AOL's parental controls, enforced them through the cable modem, and pushed hard to make a kid/family friendly service, I'm sure they'd do very well with it.

    Every parent of a 10 year old I know is convinced of two things about the net. First, their kids *need* it to be competitive in school. And second of all, it's a terribly dangerous and predatory place for kids. No one has a good answer for those parents. The best people can do is say, "Put the computer in the family room, so you can watch what they're doing."

    AOL and Time Warner were in an ideal position to deliver a solution for these people. I don't know why they didn't -- it looks like a case of corporate infighting and stupid internal turf wars, but that's pure speculation on my part.

    • Re:Time Warner has mismanaged AOL (Score:1, Interesting)

      by Anonymous Coward
      It's cliched (and not necessarily cost-efficient), but non-tech-savvy families desiring parental controls should just go out and buy a Mac with OS X Tiger installed. They'll get many of the controls they want regardless of ISP, plus a safer computing experience overall (for now).

      Coincidentally, their tech-savvy kids are probably more familiar with using Windows XP anyway, thus making it harder for them to bypass those parental controls.
    • "If Time Warner used AOL's parental controls, enforced them through the cable modem, and pushed hard to make a kid/family friendly service, I'm sure they'd do very well with it."

      They did that. Its pretty effective in Windows (don't know about the mac). It may have bad marketing, but still they did do it.

    • The best people can do is say, "Put the computer in the family room, so you can watch what they're doing."

      That's pretty effective. I remember growing up that the telephone and television were both in high traffic areas. And I can't imagine anything other than only allowing visits to white-listed sites being more effective than regular glances over their shoulder.

    • I always felt kids have to protect their parents from the amount of parental guidance disinformation they allow their TV to program them with.
  • If MSFT buys AOL, then MSN search will be the default. The search engine is the ad revenue generator that MSFT wants to expand. AOL has 110 million U.S. visitors a month to its Web and online properties, and AOL accounts for about 10% of the online advertising market.

    Google provides search technology to AOL and gives AOL a cut of the advertising revenue generated by those searches. AOL earned $300 million from Google search ad revenue last year.

    I posted this as a reply to another comment, but this battl

  • It would be a nonsensical purchase, kind of like if a hardware company (VA Linux) bought a glorified weblog (Andover). Good way to tank your stock, anyhow.
  • Holy crap. The nytimes article DIDN'T NEED REGISTRATION! Now *that's* news!
  • What? AIM Fight [aimfight.com] narrowed to two players? I thought AIM Fight was always between two players.

  • Interesting times ahead... (Score:3, Interesting)

    by MoogMan ( 442253 ) on Friday November 11, 2005 @05:28PM (#14011664)
    If either Microsoft or Google buy out AOL, we could quite easily see a closer coordination of IM systems. With Microsoft and Yahoo agreeing to link up their systems not so long ago, this could easily give Microsoft a vantage point over Google if they were to consolidate MSN+Yahoo+AIM.
  • As blasphemous at the combination seems at first, Google is the only way AOL could ever be saved from a death by obscurity. Google could buy it. Fire EVERYONE that was ever involved with it. Completely rewrite all the software, and start offering Google Online branded dial-up, WiFi, and Fiber. Merge Google Instant Messanger and AIM, eventually phasing out AIM's proprietary protocol. It's entirely possible.
    • We can model the potential AOL buyout by Google by pouring a bunch of rotten apples in a barrel of good apples and observing what happens.

      I have my suspicions as to what the results would be but haven't run the test yet.

  • Microsoft's resources dwarf them for the moment.

    I can't imagine that AOL is worth more than the available resources of either company.

  • The comments regarding the worthlessness of AOL's content and services are spot-on, but besides the point. What AOL offers Google is a horde of users. All those eyes can be redirected to Google and their lucrative search and ad system. AOL has been pushing its users outside of its comfortable womb for the past couple of years, and Google can accelerate that process significantly while still offering a familiar subset of services. Google has the vision and the resources to remodel whatever AOL services it d
  • If Microsoft buys AOL, AOL's new catch phrase should be "The Worst ISP is Now Worser!"
  • I don't see how this doesn't smack in face the DOJ settlement.
    Judge: "So, you have 99% of the desktop market which has given you the browser market due to bundling."
    MS: "Yes."
    Judge: "So, you want to buy AOL so you can then bundle MSN Search capabilities into AOL in effect forcing them to accept MSN Search much like they do with IE now?"
    MS: "Uh...yes."
    Judge: "Okay, why don't you just offer a search engine and page like Google does now? And just compete straight up?"
    MS: "Heheheh....hehehehhe..hehehe....
    • well for starters MS isn't bundling anything or abusing their monopoly to get AOL as a customer. MS doesn't have a monopoly in search, if anything Google does. They aren't using windows (their monopoly) to get aol.

      Bundling had to do with giving their software away free with their operating system, and on top of that, the violation was they didn't give people a choice to use a different product. Search doesn't work that way. People have a choice... e.g. don't use AOL or MSN. MS is using their money to
      • First, I was being a bit humorous. Second, I misunderstood and thought MS was buying a majority stake in AOL. Third, buying a majority stake in AOL, the largest ISP by the largest software maker who has already been declared a monopoly IS a concern. Perhaps I miscatagorized this deal but it's still a concern. I'm not angry at MS for succeeding, I'm angry at the means they''ve used to succeed. It is nice to see that the deal has largely been portrayed incorrectly, though.

  • Either way Google loses... (Score:3, Interesting)

    by BucksCountyCycleGeek ( 893639 ) on Friday November 11, 2005 @05:41PM (#14011792) Homepage
    I have to confess - I actually trade options and entered a fairly large "short" position in Google lately based on the two likely outcomes:

    1) Google holds on to AOL, but overpays and/or issues stock to pay. This causes the stock price to go down because of dilution.

    2) Microsoft buys AOL and denies Google the eyeballs. This also causes Google's stock price to go down.

    My read on the situation is that closer ties between MSFT and Time-Warner can only benefit both of them - it creates a diversified media/technology conglomerate which not only has the content but the technology to deliver it with all sorts of DRM. A nightmare for the Slashdot crowd, but a dream come true for RIAA-types.

    Google's only advantage here is that they're the incumbent player - it's significant, and there are obstacles in front of Microsoft. However it's hard for AOL to turn away from the green stuff.

    • This seems like an odd analysis. Isn't TW trying to get rid of AOL? Why would they also hand over all of their content along with the sale?

      By the way if google looses this fight you know they are going to go the justice dept and tie up the deal for years right?

  • Mozilla impact (Score:2, Interesting)

    by clenhart ( 452716 )
    AOL funds Mozilla developers, so if MS bought AOL, I can only imagine what would happen to them.
  • One interesting artifact of AOL's bubble valuation is the governing rates for "Small Webcasters" compulsory royalties, as set by the Library of Congress Copyright Office. A consortium called CARP (really the RIAA) arbitrarily asked the LoC for $0.0012 per listen per song for the copyright holders when streamed by orgs making less than $5M:year from the streaming operations. The LoC reduced that, to a number derived from AOL's purchase of Mark Cuban's Broadcast.com. They took the purchase price and divided i
    • . . . a number derived from AOL's purchase of Mark Cuban's Broadcast.com.

      AOL bought Broadcast.com for Internet stock . . .

      Umm. AOL didn't buy Brodcast.com for any price, stock, cash, or otherwise. Yahoo bought them.

  • The brutal reality is MS will win... some facts. (Score:5, Interesting)

    by CDPatten ( 907182 ) on Friday November 11, 2005 @06:18PM (#14012060) Homepage
    First let me state that I believe MS will win against Google. Also let's point out that AOL accounts for 12% of Google's annual revenue, and that is nothing to laugh at ($380million). The NY Times has also reported that MS is the front runner. http://www.newratings.com/analyst_news/article_110 3765.html [newratings.com]

    So what is at stake and why is AOL so important? Well take a look at these stats (as reported by the NY Times the nation's paper of record).
    September rankings
    1. Yahoo: 123 million users
    2. Time Warner (AOL and related sites): 119 million
    3. MSN and other Microsoft sites: 114 million
    4. Google: 87.6 million

    Combine AOL and MSN and they almost double yahoo and are almost 3 times Google! Advertisers will KILL to get their ads in front at that number of possible people. As far as Google's superior tools... they aren't THAT much better. 87.6million vs 233million is a big difference and lets face it MS has very good developers, lots of resources, and will catch up. They always do.

    Now where is the growth? Well, the real crown jewel is getting access to Time Warner's arsenal of media content. Most people expected the next big wave to be media, and AOL is the gateway to one of the biggest deposits on the planet.

    The winner of this battle wins more then just bragging rights. If MS beats out Google, it's going to be a HUGE hit for them financially. It's more then just loosing their 12% of revenue each year. It will also mean they will loose their premier advertising title. People will start throwing money at advertising with MSN strictly for the numbers, and that will result in more losses for both yahoo and Google.

    This is much more then a warning shot across Google's bow. I see this as a precise incision, not at Google's hear, more like cutting off one of Google's legs. They can live without it, but in a race you do best with both legs.

    • Its not 1998 (Score:3, Insightful)

      by Anonymous Coward
      If this was 1998 the concept of MS buying AOL would be amazing, but since those days AOL is not the power it once was. It has many page hits and will one day fully be a web portal, but the power AOL has in the market is diminishing. The barrier to try a new web page is pretty small, and as Google and Yahoo role out new web services (that MSN or AOL lack because it is the original focus of neither) its not that hard to pull a crowd away. What was Google in 1998? Exactly.

      The logic that you can buy percentages

    • AOL bought netscape for the exact same reason. They thought all those eyeballs focused on the (default) netscape.com web page would be a great asset. It didn't work that way.

      As long as google is better able to target and get a better click through they have nothing to worry about.
  • I hope google wins this bidding process. (I have to use M$ for work) If AOL is the devil that I believe they are, imagine the pain it would cause when all of the AOL software is bundled into the OS. This could end up being an issue large enough to cause people to jump off the Microsoft Ship.

  • Nobody wants AOL for their dialup business (Score:3, Interesting)

    by washirv ( 130045 ) on Friday November 11, 2005 @06:23PM (#14012093)
    Reading the comments here, it's not clear to me that people get why AOL is suddenly so valuable and has multiple suitors. It isn't the dialup business. AOL has about 20M customers and that number is falling month over month. So nobody is actually expecting to build a business around dialup (although quite a cash source currently). What Microsoft, Yahoo, and Google want(ed) is:
    - AOL's immense demographic information and purchase history etc on a large segment of the population. This is much much more valuable to MSFT and GOOG because they don't currently have much of this.
    - AOL's content network. AOL has a large content network that garner substantial number of impressions every day. You might not like their content, but a great number of people do. This is valuable to MSFT, GOOG, and YHOO.

    Why is all this suddenly so important? Check what has been driving Internet revenues over the last 3 years (especially Google): advertising. Search engine advertising is beginning to top out in the US, there is only so much more growth to be had there before it flattens out. The next surge must come from advertising on content networks (Adsense, Yahoo Publishing Network etc). Suddenly AOL looks like a big prize: lots of impressions, captive audience and tons of fine-grained consumer data.

    Yahoo was never a serious contender in this race, they don't have the kind of valuations that AOL would want, and they have a vast repository of consumer information already themselves so the only value to buying AOL would be to ensure that Google and Microsoft don't get their hands on it.
    • While... MS isn't smart about anything other marketing garbage products and buying political influence, I was very surprised to find a real technology company Google wanting to buy AOL, which on the face of it, seems like paying a premium price for a seat on the Titanic after the iceberg hit.
  • Loser gets AOL.
  • Meh. Whoever wins loses. Probably M$, which is cool.

  • Comment removed based on user account deletion
  • I can't believe that no one is seeing why Google wants AOL. Think about it, AOL may be a stinking pile of crap network that is sinking fast, but it still has millions of users, most of whom are oblivious types who will quite happily run whatever software AOL tells them to (and shoves down thier throat with it's automatic updates). Google would love to get thier hands on that user-base, run all their searches through Google, offer them other Google-based services, switch thier browser to FireFox (think the

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