| 6:34 am on Oct 15, 2005 (gmt 0)|
Man, it's midnight here and I just got up to read the overnight news feeds, read the bit about Yahoo, come here and it's already posted.
Boy, you have to get up pretty early (as in, never sleep), to get a scoop around here.
Here's a bit of speculation:
The whole dang bidding war isn't about content, it's about VOIP.
With Yahoo and MSN already announcing a deal to link their messenger services, they present a powerful unified front to take on AIM, the dominant IM service, in the upcoming VOIP war (and yes, a VOIP war is definitely on the way).
If either Yahoo or MSN get AOL, the unholy Yahoo/MSN instant messaging merger will mean that between the two, they'll have effectively wrapped up the IM market, and Google won't have a hope in heck of putting all that dark fibre they're buying to good VOIP use.
If Google ends up with AOL, then we'll have a real horse race for the VOIP market.
Yahoo pretty much has to take a swing at AOL because if they don't, and MSN gets it, then they'll be a decidedly junior partner in the IM merger, and probably get a teeny-weenie slice of any VOIP revenue.
MSN can't let Yahoo get AOL for the same reason.
And Google/Comcast absolutely HAS to get AOL as a matter of survival.
I've been following this for a while here (through the news and through reading the posts in here), and I hate to say it, but I think everyone's looking in the wrong direction (myself included) when we look at content as the motivator behind the buyout offers.
There are lots of places to get content out there. But there's only one place to get the market leader in instant messaging.
| 7:13 am on Oct 15, 2005 (gmt 0)|
The prize is a minority stake in the AOL Web Portal business. AOL is insisting on a controlling interest.
The primary motivation for Yahoo is speculated as keeping the portal out of Google's hands. Aside from it's not in Yahoos interest for MSN to own a minority stake in AOL, perhaps Yahoo is also not confident that MSN is able to consummate a deal with AOL and keep it out of Google's hands. Which makes it all the more urgent to step in.
MSN has been negotiating this for awhile and haven't been able to score a home run, much less get to first base. Looks like it's up to Yahoo to clinch this deal.
I can't wait to see what Google's next move is, and how this might be a turning point in Google's self-image, if not it's public image. This could very well be the big fight where Google begins to throw off the image of nerdy cleverness to reveal it has corporate muscle and the teeth that go with winning a scrap.
Yahoo has the muscle and finesse to handle this, so it's interesting to see how this showdown plays out.
| 9:00 am on Oct 15, 2005 (gmt 0)|
don't think google needs to buy aol to take the market.
See many more ways for them to conquer that market other then bying aol.
Like offering free internet to everyone :P
| 12:58 pm on Oct 15, 2005 (gmt 0)|
I don't think it's about VOIP or content. It's about eyeballs, traffic.
People are creatures of habit. Y, G, Comcast, AOL are all working to achieve the best scale as possible. Bigger is better.
You have to keep in mind this is not just an online business model. Same thing is happening in selling paint, cars, office supplies, computers--even churches are getting into scaling.
This is odd to many of us, because the web was suppose to be about empowering millions of individual voices. But, as it turns out, we're all pretty similar.
| 2:43 pm on Oct 15, 2005 (gmt 0)|
Plain and simple MSN will be permanantly marginalized in search without the AOL deal. They need that 8% that goes to Google now. Cutting 12% of Google's revenue is only icing on the cake in their eyes.
I think AOL will choose to go with MSN or Yahoo over Google because of the new IM alliance. They would be stuck with partnering with Google talk and that would IM suicide.
On the practical side Google does not have enough cash to get this done. They would have to issue some shares to TWX and those shares are already bloated.
TWX shareholders already experienced a similar debacle when they took on the AOL merger. Cash will speak here.
| 3:58 pm on Oct 15, 2005 (gmt 0)|
The deal would be valued at around 5 billion, Google has close to 7 billion in case, they don't need to raise a dime. They also don't need comcast.
| 4:15 pm on Oct 15, 2005 (gmt 0)|
GameMasterM, you do realize Google recently raised $4 billion by selling a bunch of new shares. People were confused at first why, but maybe now, it begins to make sense
| 8:23 pm on Oct 15, 2005 (gmt 0)|
>> The deal would be valued at around 5 billion, Google has close to 7 billion in case, they don't need to raise a dime. They also don't need comcast.
the deal would not be valued at $5 billion if Microsoft and Yahoo offer $7-$8 billion for it. Welcome to bidding. Plus, who can sweeten the pot more with other concessions?
I'd say Microsoft can give TW a break on something else to win the deal. Microsoft is everywhere, from desktops to cable top boxes, PDAs, and soon cars. All that said, this will be interesting to watch, because you never know. I think Microsoft can pay more in cash, and will give AOL a better deal on ad % (since it really wants the deal to screw Google), and MSFT can use it's leverage on other fields. Microsoft could easily take a few billions loss here, to gain share and stick it to Google.
If I was Parsons, with other things being equal or close to, I'd choose Microsoft (after the reading the fine text agreement of course ;)) and squeeze something else out of them. They have the cash, and Microsoft will definitely be here 10 years from now.
| 9:07 pm on Oct 15, 2005 (gmt 0)|
What is not mentioned in any of the previous posts posts is that eBay now owns Skype. Google getting into VOIP poses a direct threat to eBay. eBay and Yahoo! Auctions are direct competitors - perhaps Yahoo! sees that AOL VOIP is a way to level the playing fields with eBay and keep Google out of the market in the short term.
Any way you play this, Yahoo! must acquire that stake - hence the fact that they are now in the running.
| 9:11 pm on Oct 15, 2005 (gmt 0)|
Sorry, I forgot to mention why Google poses a direct threat to eBay:
1. Google Payments (Expected to launch soon), competes with Paypal.
2. Froogle - competes with Shopping.com
3. Google VOIP would compete with Skype
4. Google is eBay's #1 source of new customers (both via affiliates and natural search), if Google setup Google Auctions - the whole thing could start falling apart at the seams for eBay.
| 9:52 pm on Oct 15, 2005 (gmt 0)|
Just by showing an interest raises the price the others will have to pay
| 11:05 pm on Oct 15, 2005 (gmt 0)|
MSN knows Google only has 7 bil in cash. Taking 12% of Google's revenue and taking away 8% of their traffic is too important.
Google will deplete their cash to basically keep the traffic they now own?
MSN has them on their heels right now playing defense.
I love it.
Anyone want to bet Yahoo is only sticking their head in there just to make the eventual winner pay more?
| 11:08 pm on Oct 15, 2005 (gmt 0)|
I guess you did bet that Jgar. LOL I should have read the entire thread before responding!
| 1:43 am on Oct 16, 2005 (gmt 0)|
>> The deal would be valued at around 5 billion
I think it would be much more than that ...Last time i checked AOL generated more than 2 billion in revenue and is highly profitable.
Even though its subscription business is shrinking i think it would still be valued for atleast 10-12 billion
| 4:07 pm on Oct 16, 2005 (gmt 0)|
Last I heard, Google wasn't pretending any desire to go it alone with an AOL purchase - it was proposing that it would be part of a joint venture owned by Time Warner, Comcast and Google. It would seem that Google has never proposed that it would come up with the entire purchase price on its own.
I would not expect to see Google Auctions. Consider the precedent of Yahoo Auctions, which has been around for years yet has never been able to escape from eBay's shadow.
| 4:13 pm on Oct 16, 2005 (gmt 0)|
>>Like offering free internet to everyone
Didn't work for Alta Vista when they tried it.
| 12:34 am on Oct 17, 2005 (gmt 0)|
I would also add that aol users seem to buy more things, so I don't know squat about VOIP but I would say that a well converting customer base is worth something.
And why wouldn't Y join in, if anything MSN or G get it but pay a hell of alot more.
| 11:43 pm on Oct 24, 2005 (gmt 0)|
Did you ever check your logs out? What i found across the board was that Adwords wise, Google alone does not produce much. Whenever I start a campaign, the first day or two the clicks come from Google alone. Then it expands into the search network and I get 10x the clicks and half the adword clicks are from AOL users. AOL users tend to click way more ads and buy much more online. They may produce 8% of searches, but they seem to produce more than 8% money generating traffic.
The truth is Google is fairly weak without the search network and the content network. MSN needs those search partners to usurp Google's power. AOL is the logical starting point. Grab AOL and you also get Netscape's dial portal. That's 10% of the traffic right there swinging MSN's way. I bet they don't stop at AOL. They will keep knocking off one partner after another. By the time the MSN version of awords is ready, I think they will be on equal footing and MSN has way more than 7 billion in the warchest. 3 years from now, we could be saying Google who? just like Netscape who?