AOL-Google: The Search For Meaning Redux

Safa Rashtchy, analyst, Piper Jaffray (Reuters): “I view it as a generally positive deal for Google… I suspect the video side is the most exciting piece for Google. The biggest drawback of searching for video on the Internet is the lack of good quality (programing).”

Todd Chanko, analyst, JupiterResearch (USA Today): “What Google is getting for 5% is access to all the bells and whistles through AOL.”

John Battelle: “I await clarification of how exactly this will effect paid results and inclusion of AOL content, but the counterspin from Google has been quite strong that results will not be affected. I buy that entirely as it relates to organic SERPS, but I have yet to confirm the same is true of the auction or the one box.”

Alan Murray, WSJ (sub. req.): (I wish I could run the whole column,) “Indeed, the ransom to AOL seems to prove the point that Google isn’t unassailable. Time Warner was on the verge of cutting a deal with Microsoft and taking AOL’s search business away from the Googleplex. Google had to pay to keep that from happening. That’s a billion dollars that starry-eyed investors turned over to the company this fall, thinking it would be used to invest in Internet telephony or some other great new business. Instead, it was used to hold on to old business. Shouldn’t that be a clear warning sign that Google’s costs of acquiring business are going to rise, and its triple-digit profit increases are bound to slow?”

Laura Martin, analyst, Soleil Securities (Bloomberg/Seattle Times): “This will require all of us on the sell side to revalue the AOL piece of Time Warner. … This allows Time Warner to retain the strategic upside of AOL. It retains for Google a major part of their revenue. It’s a win-win for both companies.”

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