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Could Google bid for AOL?

     
11:46 am on Sep 20, 2005 (gmt 0)

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With Microsoft in talks with AOL, [webmasterworld.com] speculation includes Google protecting its interest at AOL.
[news.zdnet.com...]
12:04 pm on Sept 20, 2005 (gmt 0)

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I mooted this one a few days ago:-

[webmasterworld.com...]

Msg #23

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.

12:16 pm on Sept 20, 2005 (gmt 0)

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Ditto on the sold off. It's about time.

Now the question is, who do you want to see buy it? Google or MSN?

My vote = MSN. I have to cheer for the underdog.

12:58 pm on Sept 20, 2005 (gmt 0)

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Microsoft an underdog... hmmmm.
12:59 pm on Sept 20, 2005 (gmt 0)

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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.

TJ

1:37 pm on Sept 20, 2005 (gmt 0)

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Trillian,

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...

1:38 pm on Sept 20, 2005 (gmt 0)

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I'm for both MSN and Google. I just hope that they can run Yahoo out of town. :)
1:39 pm on Sept 20, 2005 (gmt 0)

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AOL is completely alien to knowledge-based structure of Google. The kind of layoffs that AOL will have to go through regardless of being bought by Microsoft or anyone else will reflect badly on Google. I doubt they will bid.
1:51 pm on Sept 20, 2005 (gmt 0)

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I have not researched it myself, is Time-Warner-CNN or whatever they call that company really interested in selling AOL?

They are going to take a bath because they really overpaid.

However, it would be a really good move for google if the price is right.

1:53 pm on Sept 20, 2005 (gmt 0)

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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.

2:00 pm on Sept 20, 2005 (gmt 0)

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I agree with Lord Majestic. The idea of 'cutting edge' Google running the company people use when they know nothing about the internet seems absurd. It feels much more of a microsoft thing. It's far more hotmail than blogger. Isn't it?
2:33 pm on Sept 20, 2005 (gmt 0)

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>>Actually it was AOL who bought Time-Warner

Really, I thought it was the other way around. I could be wrong, but we agree, it was a disaster.

2:47 pm on Sept 20, 2005 (gmt 0)

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They are going to take a bath because they really overpaid.

They already took a bath. Ted Turner went from Billionare to millionare.

MSN picking up AOL would really balance things out as far as the SE wars and my own personal SE traffic.

3:43 pm on Sept 20, 2005 (gmt 0)

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I find the idea of Google buying AOL hilarious.
Anyone who knows a little about both companies should have better sense.
4:50 pm on Sept 20, 2005 (gmt 0)

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Would that be as hilarious as eBay buying skype?

Sometimes buying a property to keep it away from a competitor that has vowed to F*&*&#ing kill you, is not a bad strategy.

5:19 pm on Sept 20, 2005 (gmt 0)

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Idea of Google buying AOL is Hilarious? Does $382 million dollars of revenue mean anything?

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.

6:11 pm on Sept 20, 2005 (gmt 0)

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Does $382 million dollars of revenue mean anything?

Actually I think it will be much more when Google can keep all the revenue.

6:29 pm on Sept 20, 2005 (gmt 0)

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Google should buy and sell it to IAC. ;)
6:32 pm on Sept 20, 2005 (gmt 0)

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Idea of Google buying AOL is Hilarious? Does $382 million dollars of revenue mean anything?

It means nothing because AOL loses far more -- its not a profit center and that's why Time Warner wants to get rid of it.

6:35 pm on Sept 20, 2005 (gmt 0)

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It means nothing because AOL loses far more -- its not a profit center and that's why Time Warner wants to get rid of it.

What's your source?

6:43 pm on Sept 20, 2005 (gmt 0)

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What's your source?

I've been following AOL ever since they bought Netscape, WinAmp and then Time Warner -- have a look at what happened there in the last few years: layoffs, falling market share -- their core are the dial-up users and this pretty much speaks for itself.

7:09 pm on Sept 20, 2005 (gmt 0)

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Their market share will almost certainly continue to decline. But that doesn't mean they lose money. They charge over $20 per month to millions of customers. Even if they lose 10% of their customers per year, there's a lot of potential for profit there.

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.

7:15 pm on Sept 20, 2005 (gmt 0)

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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.

7:37 pm on Sept 20, 2005 (gmt 0)

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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.

7:55 pm on Sept 20, 2005 (gmt 0)

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What if Google were to buy Time Warner?
7:57 pm on Sept 20, 2005 (gmt 0)

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Keep in mind that Google is about to get 4 Billion in cash thru a stock offering PLUS they are quietly buying up tremendous amounts of "dark fiber" around the country.

Tells me that AOL and google would be a great match up.
Instant subscriber base etc. etc.

8:11 pm on Sept 20, 2005 (gmt 0)

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According to a recent story in Bloomberg
[quote.bloomberg.com...]

AOL "accounted for 21 percent of Time Warner's 2004 sales and 18 percent of its operating profit."

According to Yahoo Finance,

[finance.yahoo.com...]

[finance.yahoo.com...]

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.

8:34 pm on Sept 20, 2005 (gmt 0)

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maybe aol has a crack addiction or something?
8:34 pm on Sept 20, 2005 (gmt 0)

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but please do not say AOL is losing money. They aren't.

AOL was losing money up pretty much until now -- if you take total profits in the last few years you will see they ain't high. They can be positive now but this is because they cut costs big time and now hope to offload it.

8:36 pm on Sept 20, 2005 (gmt 0)

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AOL will always have a place. I have kept an account for the company for years. It is great for use on the road in hotel rooms. Much cheaper that than using the high speed service that the hotel chains offer.
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