[IP] more on DO READ Summarized -- Google buys 5% ($1B) stake in AOL
Begin forwarded message:
From: salesman44-ip@xxxxxxxxx
Date: December 17, 2005 6:03:05 PM EST
To: dave@xxxxxxxxxx
Subject: Re: [IP] Summarized -- Google buys 5% ($1B) stake in AOL
Reply-To: salesman44-ip@xxxxxxxxx
Dave,
The Post didn't mention this tidbit that was found in
the NYT:
"Finally, around 9 p.m., Richard D. Parsons, chief
executive of Time Warner told Eric E. Schmidt, chief
executive of Google, that he would accept Google's
recently sweetened offer. Google, which prides itself
on the purity of its search results, agreed to give
favored placement to content from AOL throughout its
site, something it has never done before.
I'm not quite certain what is meant by favored
placement, but on the face of it... it does not sound
good for Google's customers.
http://www.nytimes.com/2005/12/16/technology/16cnd-aol.html
--- David Farber <dave@xxxxxxxxxx> wrote:
http://www.washingtonpost.com/wp-dyn/content/article/2005/12/16/
AR2005121601892.html
Google Inc. is buying a 5 percent stake in
Dulles-based America
Online Inc. for $1 billion as part of a far-reaching
business and
advertising partnership aimed at boosting AOL's
financial prospects
as the Internet service struggles with the loss of
millions of
subscribers.
...Under the agreement, Google will remain the
search engine on the
AOL service for five years and Google will give AOL
millions of
dollars of free advertising on the search engine to
promote its
network of Web sites.
...While AOL has been losing subscribers, it is
still the nation's
biggest Internet service, with about 20 million
users who pay for
Internet access; e-mail; and an array of music, news
and other content.
...AOL's most popular feature is its free
instant-messaging service,
which has about 43 million users who chat online
through text
messages and provides an attractive platform for
Google to
dramatically expand its presence in free telephone
service over the
Internet.
...Icahn, who has been pressuring Time Warner to
consider the sale of
a majority stake in AOL, spin off its cable division
and use cash to
buy back tens of billions of dollars worth of its
stock, criticized
the AOL-Google agreement yesterday.
...The existing arrangement -- under which Google
provides text-based
ads and free search results on AOL -- will continue,
with AOL keeping
80 percent of those ad proceeds and Google taking 20
percent.
Businesses pay for such ads, which appear to the
right of and above
the free Google search results, only when computer
users click on them.
As part of the new agreement, AOL also gains the
right to sell Google-
generated text-based ads that appear on the America
Online network of
Web sites.
...One source said AOL will also have the right to
buy graphic ads
that appear alongside the text-based ads Google
traditionally has
displayed to the right of its free search results.
...The five-year deal gives Time Warner the choice
of maintaining its
95 percent ownership stake or spinning off a portion
of AOL to
shareholders to boost its stock price.
...Lawyers for Google and AOL will work out the
final details of the
new alliance over the weekend, before Time Warner
board members, who
have given their informal consent to the arrangement
already, vote on
the transaction.
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