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Monday, December 19, 2005

Battelle on the AOL Google thing: "Google will also make a special effort to incorporate AOL video programming in its expanding video search section and it will feature links to AOL videos on the video search home page. These links will not be marked as advertising.

An executive involved in the talks said Time Warner asked Microsoft to give AOL similar preferred placement in advertising and in its Web index and that Microsoft refused, calling the request unethical. "

My view: The deal is a good short term investment for Google. I am sure that that deal will be profitable for Google. Getting 5% of AOL for 1B is good - getting access to AOL customers (non-technical / less likely to google) is good - getting political access to Time Warner to fuel the adwords magazine expansion is good.

Compromising the ethics that made Google so successful to gain these advantages? Very bad. In fact, if you look at it from AOL's perspective they are making out like bandits. Just being associated with GOOG will make the company worth twice as much. Getting free ads and preferential treatment is fantastic!

Long term: AOL has nothing to do with google. The people who work for Google have probably never been AOL subscribers. These are exactly the people who made fun of AOL 5 years ago. Also, what does AOL have to do with search?

In short, Google is buying customers. Will probably work out as a short term thing, but maybe not the best place to put 1B when everyone is gunning for you.

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