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I wonder if zdnet read here?!
One thing is for sure - with two potential deep-pocketed buyers, both of who would find it a useful asset, now is a good time for AOL to be sold off.
I expect a price war to ensue.
Microsoft an underdog... hmmmm.
I know it sounds like a strange thing to say about MS, but in the search world it's absolutely true.
I'd also be forced to vote for MS - competition is a healthy thing.
Here's a little extra thing to think about. AOL have a VoIP product called TotalTalk, now available in Canada, I understand due to be released in the UK this week or next.
It uses global IP sound and is based on SIP, which means it will interface perfectly with Google Talk...
MS on the other hand have yet to jump on the VoIP bandwagon (and they've now missed the opportunity to buy Skype), but given AOL's market share of IM, it could be an ideal opportunity to convert both MSN and AIM users to VoIP and grab some instant market share. In fact, between the two, they'd be bigger than Skype.
I really think that MS and G will both want AOL. Quite badly.
AOL is not "search world", it's "Portal World/ISP World", a place that Google has never ventured. It's controlling entry point to the web, something that G needs terribly.
Previous search technologies that were at the top of the heap in their heyday (AV/Inktomi), but didn't have a portal that controlled a strong entry point to the web, died.......
One of the reasons that Yahoo rebirthed itself stronger than ever in late 2002, was their partnership w/ SBC, and the co-branding that has ensued in the US market.
MSN countered with heavy branding of their ISP services, and AOL began to flounder.
I think AOL has come back over the past few months with a solid marketing campaign in the US.
But with the major 5-10 players, also including Eathlink, the cable broadband players, Google better get off their duff, and make a move into the Portal/ISP space.
Cool is cool, but word of mouth is only going to take you so far in life.... Ask Inktomi and AV...
They are going to take a bath because they really overpaid.
Actually it was AOL who bought Time-Warner, who are not really pissed off because AOL paid with worthless shares for something that actually had big value. Now they want to get rid of underperforming dog of a company -- will certainly sell it for a good price.
Seems like a business decision waiting to happen. Google needs to protect 12% of revenue. They can buy AOL with "worthless shares" just like AOL bought TimeWarner in the past. aol.com is #11 English-language site on Alexa. You don't give that kinda leverage to your competitor (Micro$oft).
I personally would never rebrand it though, keep Google google and AOL aol. Please, no "powered by Google" button on aol.com.
Re Google: Google makes almost all of its money from ads. AOL is a big source of that revenue. If AOL started showing Yahoo ads or ads from a future Microsoft service, that would be a blow to Google.
Idea of Google buying AOL is Hilarious? Does $382 million dollars of revenue mean anything?
AOL is hemoraging subscribers, their revenue base is drying up radically.
Even their "member retension teams" (customer saves) can't even keep employees around because they work on commision (I still have friends there so I know this is truth).
AOL might be able to keep some value in their name but other than instant messaging they don't have much else to offer the rest of the world these days.
Granted Google has lots of cash to spend but AOL is SO not their style.
But that doesn't mean they lose money.
Last time I checked they were losing money, hence desire in TW to get rid of them. Companies don't sell big parts because they are cashcows, they sell them because they can't fix them and make profitable.
The only exception to this rule is when some company offers totally stupid money in order to get market share.
AOL "accounted for 21 percent of Time Warner's 2004 sales and 18 percent of its operating profit."
According to Yahoo Finance,
Time Warner in 2004 had EBITDA of $10.02 billion, net income of $3.4 billion.
I am not saying AOL is a good investment for Google or MSN or anyone else, but please do not say AOL is losing money. They aren't.