Why Was Google So Desperate for AOL?
Posted by: Rob Hof on December 18, 2005
I don’t get it. Here’s a company that seems to have everything going for it—absurdly high revenue growth and profits and a $127 billion market cap. But according to this New York Times story:
Google will also provide technical assistance so AOL can create Web pages that will appear more prominently in the search results list. But this assistance will not change computer formulas that determine the order in which pages are listed in Google’s search results.
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.
An executive involved in the talks said Time Warner asked Microsoft to give AOL similar preferred placement in advertising and in its Web index and that Microsoft refused, calling the request unethical.
So if that account is correct, it’s seemingly giving up the vaunted purity of its search results for… what? AOL represents a small portion of its revenues, yet Google’s paying it a billion bucks for the privilege of looking less ethical than Microsoft. As Nick Carr says, Ouch. Is this the moment when Google has jumped the shark, as John Battelle asks?
Even after trolling through the massive coverage through memeorandum, something doesn’t feel right. If anyone can identify just what Google’s getting that’s worth risking its reputation (deserved or not) as the best search site, I’m sure readers here would love to hear it….