Topic: Google acquires stake in AOL

[IZ]

NEW YORK (Reuters) - Google Inc. and America Online Inc. Tuesday expanded their search and advertising alliance to include video and instant messaging, shutting out Microsoft Corp., which had fought hard for a deal with Time Warner Inc.'s AOL unit.

America Online said Google had agreed to invest $1 billion to take a 5 percent stake in AOL, as part of an enhanced pact where Google will move beyond text-based advertising to allow AOL to sell graphical ads to Google's fast-growing ad network.

The stake effectively values AOL at $20 billion, a key benchmark should Time Warner elect to spinoff or sell a part of its Internet unit in response to dissident shareholder Carl Icahn's proxy campaign to break up the company.

Terms of the deal call for AOL to make more of its Web sites searchable via Google search, including a plans to feature AOL's premium video services within Google Video, a way of searching for Web-based video programming.

They also said they had agreed, under certain unspecified conditions, to allow users of Google's recently introduced instant messaging system Google Talk to communicate with users of AOL's market-leading AIM instant messaging service.

Ahead of the announcement, analysts called the new agreement a major defensive win for Web search leader Google, depriving Microsoft (Research) of a major customer that would have jump-started its push to compete with Google in the online ad services market.

In a letter to Time Warner's board of directors released Monday, billionaire investor Icahn labeled the potential AOL-Google deal as "disastrous" because it may rule out potential future deals AOL might do with Google rivals such as eBay Inc. (Research) or Microsoft.

Shares of Google (Research) edged lower in after-hours trade on the Nasdaq Tuesday after closing at $429.74. Time Warner (Research) shares edged higher after the bell after closing over 1 percent higher at $17.74 on the New York Stock Exchange.

Time Warner is the parent company of CNNMoney.com

http://money.cnn.com/2005/12/20/technology...dex.htm?cnn=yes

[abney317]

I have AOL so that is good for me

[Snowthrower]

I have AOL so that is good for me

[snapback]262667[/snapback]

Extremely bad move Google. Shame on you.

[UltraSpongeyDude]

hmm.

I dont really get what Google gets out of this deal, but I dont use Google or AOL, so it dosent effect me.

[VulturEMaN]

I have AOL so that is good for me

[snapback]262667[/snapback]

Extremely bad move Google. Shame on you.

[snapback]262690[/snapback]

Don't count your walnuts yet. This just means that Google is looking to eventually buy AOL. And:
1. That will be huge when they do it.
2. I predict that it'll happen within the next year.

This will mean many things...but I know none of them! ahahaha...

[partiallynothing]

Buying a large chunk of AOL will allow Google to do things like support the AOL Instant Messenger protical in Google Talk and allow Google to use facilities like AOL's huge CD creation plant (you know, the one that makes all those useless AOL CDs we get in the mail).

And most importantly, it means Microsoft will not be getting a stake in AOL, which is excellent for Google.

[VulturEMaN]

indeed, but the other side of the coin says that aol is gonna want some help back too....what will google do to aol?!?...maybe they'll make aol fast....omg...rofl

[IZ]

indeed, but the other side of the coin says that aol is gonna want some help back too....what will google do to aol?!?...maybe they'll make aol fast....omg...rofl

[snapback]262982[/snapback]

Google is good, but they're not gods.

[IceFox]

indeed, but the other side of the coin says that aol is gonna want some help back too....what will google do to aol?!?...maybe they'll make aol fast....omg...rofl

[snapback]262982[/snapback]

Google is good, but they're not gods.

[snapback]262988[/snapback]

Hahaha. Nice.

Anyway, this could be good for Google, ecspeccily because of the fact, wether you like it or not, AOL is a BIG company.