The news that Google beat out Microsoft for a slice of AOL is sinking in and the reaction is interesting. But first: The New York Times’ Saul Hansell has an interesting piece that describes a priceless scene of last-minute negotiations yesterday, with Google execs in one room and Microsoft execs in another room in the Time Warner Center with Time Warner decision-makers walking back and forth between the two rooms.
Now for the instant reaction: most commenters zero in on Google’s willingness to give AOL favored placement in search results. After all Google is best known for its objective, mathematically derived technology and has built its empire on being better and more “pure” than other search companies. “So much for the purity of the algorithm,” Nicholas Carr writes. [Clarification: as one commenter on Carr’s blog notes, Google must be agreeing to give AOL preferred placement in the search ads and not the results — the more I think about it, the more it seems impossible that Google would muddy its actual search results.]
Carr also asks
The question is: How many more deals will Google need to cut with advertisers and publishers in the future? Is this deal a sign that Google is consolidating its power or losing it?
To answer Carr: Google probably has no other single network “member” that has AOL’s swack (AOL accounts for 10% to 14% of Google’s revenues.) Moreover, Google was in a defining fight with Microsoft and that’s not likely to happen again soon. I’m not saying other Google customers won’t get big ideas, but this situation is probably unique and the deal probably only further solidifies Google’s power.
One thing is clear: this is not good news for Microsoft, which lost perhaps its only real chance to compete with Google in the search business. As Hansell points out “Now Microsoft will compete in the search business as a distant No. 3 behind Yahoo.”
Cynthia Brumfield at 8:56 PM|Comments(1)
I am heartbroken. I have been a loyal Google fan since day one and the news is so disappointing. Sure, it's great to see Microsoft thwarted, but hearing that Google has agreed to give AOL search results preferential ad space--it's own results box!--turns my stomach. What if searchers actually believe that AOL has something worthwhile to offer?! The horror, the horror. My job, educating newbies, just got harder. (NO AOL, NO AOL, PLEASE, NO AOL!)
Posted by: Kimberly Ann Kubalek at December 17, 2005 2:06 PM
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