Tom Ortega II

Google’s Gains from AOL

In Technology and Software on December 20, 2005 at 11:17 am

Everyone keeps talking about how bad Google made out in the AOL deal, but I think they’re missing some key points. Granted most of my points and opinions are derived from the NY Times article. Regardless, here are my thoughts.

Google has agreed to give AOL ads special placement on its site, something it has not done before. Until now, Google prided itself on its auction system for ads, which treated small businesses on an equal footing with its largest customers.

It doesn’t say that others can’t follow in AOL’s footsteps. Knowing Google, this will become an option for anyone. Kinda like eBay’s ” Promote Your Listing on eBay”. Give us some more cash, and we’ll help it stand out. However, I hardly call the bottom right hand corner as “special” placement.

They will also carry AOL’s logo, the first time Google has agreed to place graphic ads on its search result pages.

They probably wanted to try this on a global scale anyway, as an experiment to see how it works out. There’s nothing wrong with making a little money with their experiment.

Google will also provide technical assistance so AOL can create Web pages that will appear more prominently in the search results list.

The flip side is that Google is then going to have a cached copy of every piece of content the TW empire has ever created. Not a bad deal considering they only have to offer up advice that is freely available. I can only imagine that in the days to come, we’ll find out that the technical assistance wasn’t anything special. You can picture the discussion now between Dick and Eric:

Dick: “I want you guys to also help us show up in your results more. I know we have relevant content, but it hardly shows up in searches.”

Eric: [Thinking to himself: Well, the information to help them is freely available on the internet, but if we help them, then we’ll be sure to have all their content in our DB and earn some brownie points.] “Sure, if that will help push the deal further, we’ll help you.”

Dick: [Sucker, we just got help that is worth untold millions]

Eric: [Sucker, we just scored points by offering a few entry-level SEOs.]

Google will also make a special effort to incorporate AOL video programming in its expanding video search section and it will feature links to AOL videos on the video search home page. These links will not be marked as advertising.

Easy access to some of the “best” (read: popular) content for free? How is this not good for the Google average user base? Remember, most of the population isn’t geeks. They read People and US magazine, and they like it! =)

An executive involved in the talks said that as recently as two weeks ago, Mr. Parsons told Microsoft executives that he preferred their bid. Still, that executive said, Microsoft had the impression that executives in the AOL unit preferred to work with Google. Yesterday, several AOL executives said that was true. A source close to Mr. Parsons said his only goal was to do the best deal for AOL’s future.

I think that Mr. Parsons non-stated stated stance was a bunch of crap. Dick probably said that to hopefully garner what he wanted from Google, which furthered “his only goal”. Of course AOL preferred Google, Microsoft was their enemy for so long. It’s hard to put that aside. “Yeah, I know we tried to kill you once, but my have we told you lately how beautiful you look?” I don’t think so.

AOL executives are attracted to the idea of offering marketers a full range of Internet advertisements, from splashy ads on the home page of AOL.com to text ads.

Once again, Google gets first hand view of “beefier” ads and the results they garner on a huge scale. I think they’re hoping to justify text ads. “We’ve seen the stats between flash ads, image ads, and text ads. There is no benefit, and actually a hindrance, to using non-text ads.” Or if they find out the opposite then it’s “Oh crap, banner ads do work better than text ads. Let’s use AOL to figure out how best to technically work them out.” Either way, they win.

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