Friday, December 16, 2005

Google Buys Into AOL

Google is buying 5 percent of AOL, in a victory that prevents MSN from getting a piece of the subscription service/content portal.

The deal helps AOL because it could get more exposure on Google's advertising network, while Google advertisers will have greater access to tap into AOL's extensive content and subscriber base.

As I said last week, the two companies make much better bedfellows than MSN and AOL, which more directly compete.

"We believe this deal makes it more difficult for MSN to develop a strong advertising network as scale is very important in order to attract (advertisers)," says JPMorgan analyst Imran Khan, as quoted by News.com. "By tying up AOL, Google has made it more difficult for MSN's ad network to reach critical mass."

So the question is, how does MSN answer back? MSN needs more eyeballs for its search, so buying a media property with lots of customers and getting them to switch from Google sounds promising.

Posted By John Gartner at 07:24 PM
Permanent Link: Google Buys Into AOL | Comments (0)

Post a Comment