May 29, 2008

AOL Joins OpenSocial

At the All Things Digital conference, AOL announced that it would be joining Google's OpenSocial. AOL recently acquired social network Bebo, which had already joined OpenSocial. First up will be the adoption of gadgets on myAOL.com. Writing on the OpenSocial blog, AOL Principal Software Engineer Eric Staats said, "We're excited to work toward supporting Gadgets and OpenSocial across AOL's many products, platforms and services. By working with Google and other leaders in the industry to create products based on a more open, uniform standard, AOL and AOL users will be able to safely take advantage of a wide variety of new applications within our products that have been built by developers around the world.

Posted by Nathania Johnson at 11:39 AM | Permalink | Comments (0)

April 11, 2008

Yahoo Execs Bad Mouthing AOL!

Guess Yahoo does not want to partner with anyone these days... well apart from their biggest competitor Google. The Wall Street Journal blog, All Things D, just posted an entry by Kara Swisher, that details the grumblings of some top Yahoo managers overheard at a luncheon CEO Jerry Yang was having with his SVPs and others.

Swisher overheard them "talking about the unhappiness they felt over the possible deal Yang was concocting with AOL, as an alternate to the unsolicited bid made by Microsoft."

Am sure Jerry will not be pleased by this story, considering he had the AOL idea. Will more senior staff be leaving Yahoo if this partnership goes forward? We wsill have to wait and see.

Posted by Frank Watson at 3:47 PM | Permalink

August 14, 2007

AOL's Tacoda Being Sued For Patent Infringement

Modavox has claimed that Tacoda violated its patent on a “Method and System for Adding Function to a Web Page,” ClickZ reports.

"There is speculation that Tacoda's pending acquisition by AOL could have triggered the patent infringement suit. The patent is said to cover technologies that serve customized multimedia content and advertising to its users. The patent was filed for in 1999 and given to Modavox in 2003 while it was operating under the name SurfNet Media Group.

Nathaniel Bradley, CTO and chief product officer of Modavox stated, “We really focused on Tacoda a long time ago when they came out with their whole business model. Tacoda is one of many potential infringers out there. It's impossible for us to sue everybody.” Other competitors he mentioned were AlmondNet and Revenue Science," ClickZ reported.

Posted by Frank Watson at 5:23 PM | Permalink

January 24, 2007

It's Elementary, My Dear Watson™

Earlier today, Intellext™ and AOL announced the launch of the AOL@SCHOOL desktop sidebar, designed to help K-12 elementary school students with their homework, but without having to search the open Web for the answers. Instead, this smart application proactively returns relevant content from hand selected educational resources related to the topic the student is working on - whether it be online, in a word processing or other desktop application. Students can also actively use the sidebar for deeper research into their homework topic.

The desktop sidebar was created using Intellext's next-generation Watson™ contextual search technology in conjunction with AOL@SCHOOL's search engine. Students can have the sidebar installed for free at school or home, and the tool can interpret the topic the student is working on and automatically find safe, age-appropriate and relevant search results from AOL@SCHOOL's collection of the best K-12 education content on the Web.

In a conversation with Dr. Jay Budzik, co-creator of Watson™, he noted the partnership has been a terrific opportunity to private label the contextually relevant search technology. By using a content publisher of high-quality educational resources such as AOL@SCHOOL, they have created an engaging learning environment while ensuring safe search for kids, presenting results without commercialization.

“This software will transform the way that students do their homework,” added Mark Stevens, AOL's Education Director and General Manager, added “At AOL@SCHOOL, we are dedicated to making learning fun and engaging while keeping kids safe as they surf the Web.”

While librarians may argue that students need the process of research to learn, today's educators are growing increasingly frustrated that traditional online search tools are not able to return the most relevant or safest results, and see this tool as a more efficient research tool for students. Since the tool proactively returns matching topics as the students get deeper into their work, they are exposed to related concepts they may not have discovered by researching on their own. The student then can dig deeper into the new materials and learn more actively. Product research showed the relevant content returned in the sidebar gets used in a different manner by students, and more frequently, added Budzik.

You can learn more about the tool and download the AOL@SCHOOL sidebar here.

Posted by Elisabeth Osmeloski at 5:12 PM | Permalink

January 18, 2007

PPC Back Fill Map or Who Is King Of Garbitrage

While this is not news - it really should be. Most of the small search engines are arbitraging one way or another. And the Big Three (clearly 3 since Ask back fills Google PPC) make their cuts on the front end.

A Bruce Clay map for all the PPC partnerships and the rules that govern them would be handy.

My rant here started when I noticed at Ask that we were not being served Ask ads but rather our Google ads. Spoke to one of the people over at Ask and was told that they back fill with Google when the CTR drops below their acceptable level.

Guess that is the level where Google would pay them more to put their ads in... so some of our $10 plus Google terms pay Ask more (rumors of what percentage vary but let's work with 60%) - they get $6 a click from Google when we advertise for say $3 on Ask.... so the CTR would have to be 200% to make them enough money to change....

They are not the only ones.... I see many of the small engines pushing their results out into even thinner search provider portals.... the search results may stay at the site but the results are feed straight from another engine... yet many of these engines also arbitrage their onsite inventory with one of the Big Three so they force their advertisers to bid up to at least what these other people are willing to pay.

Not making much sense - after a while people are going to realize they are just using variations on Google, Yahoo and MSN and just go there first.

I want to start a Back Fill Map - so everyone post what you know in the forum and I will develop something that we all can use.

Posted by Frank Watson at 4:05 PM | Permalink

October 30, 2006

Yahoo To Buy AOL? Sell To Microsoft? Merge With eBay? Or Keep Status Quo?

Fortune reports that rumors are spreading that Yahoo is in talks with Time Warner about buying AOL. The article says, "FORTUNE has learned from multiple sources that Yahoo recently approached Time Warner about buying America Online." That rumor was shot down by Time Warner explaining "that there are no active conversations between the two companies." So the article then goes into what-if scenarios. What if Yahoo did buy AOL? What if Yahoo sold out to Microsoft? What if eBay and Yahoo merged? And what if Yahoo kept with the status quo?

Posted by Barry Schwartz at 9:40 AM | Permalink

August 10, 2006

Google Pays AOL $400M In Ad Deal

Bloomberg reports that Google will be paying AOL up to $400 million in an ad deal. The report says "Google will make as much as $100 million in co-marketing payments and give AOL up to $300 million in advertising credits over the life of the agreement." More details at Bloomberg.com.

Posted by Barry Schwartz at 11:11 AM | Permalink

May 26, 2006

AOL Video Gets Google Video Promotion

Way back when Google and AOL cut their partnership deal, AOL was to get promotion on Google Video. What, big flashing neon AOL banners? Actually, Google said it would be low-key. And that's pretty much what's been delivered. Gary Price noted earlier this week that a small AOL Video link had been added to the reverse bar of the Featured section of Google Video. Look over there on the right-hand side. You can't -- well, you can -- miss it.

Posted by Danny Sullivan at 11:20 AM | Permalink

March 29, 2006

Google Reaches Definitive Agreement To Buy 5% Stake In AOL

Reuters reports that Google has finally reached an agreement with AOL to buy a 5% stake in the company. You can view the update here that says, in part; "On March 24, 2006, the parties signed definitive agreements governing this $1 billion investment in AOL and Google expects that the investment will close in the second quarter of 2006." So Google needs to hand over $1 billion in cash to AOL to acquire a 5% equity interest in AOL.

Posted by Barry Schwartz at 4:09 PM | Permalink

March 17, 2006

Google And AOL Still Talking; Deal Deadline Extended

Reuters reports that Google and AOL are still in discussions about Google buying 5% of Time Warner Company. They have extended the deal deadline to March 17 and it can be extended even again, according to the U.S. Securities and Exchange Commission. The deal was to extend Google AdWords syndication on the AOL portal, as well as an instant messaging and video partnership.

Posted by Barry Schwartz at 9:32 AM | Permalink

February 9, 2006

Eric Schmidt Clarifies Google & AOL's Roles at AOL

Nathan Weinberg points to a summary of Google's CEO Eric Schmidt's recent visit to AOL, where a difference between how each company defines "programmers" came up. Are programmers more about technology or programming content, asked AOL senior vice president Sree Kotay:

At AOL, we tend to have Programmers that offer our members a very managed experience that comforts them, whereas at Google, its much more automation and technology oriented - can you comment on this philosophy difference?

Eric Schmidt reportedly replied to that with the following statement;

"When you say Programmer and we say Programmer, we mean very different things... Does that answer the question?"

For many, Eric's reply perhaps did not answer the question. Kotay adds in comments after his original post:

I think he was pointing out, very succinctly, that the cultural values of our companies - reflected in the language we use in our everyday worklives - results in very different (no particular judgment implied) value propositions that we deliver to our partners and customers.

Posted by Barry Schwartz at 11:24 AM | Permalink

January 24, 2006

When Carl Talked to Barry: Sources Say Time Warner Investor Carl Icahn Has Had Conversations with IAC/InterActive (Ask Jeeves) CEO Barry Diller

According to this Fortune.com story: Time Warner: Is Icahn looking to deal with Diller?, that legenday investor Carl Icahn (controls about 3.1% of outstanding TW shares) and who is preparing to wage a proxy fight for control of the TW Board of Directors has had conversations with IAC/InterActive president, Barry Diller.

From the article: Icahn is also seeking to merge some of Time Warner's businesses -- AOL, the TV networks, and the movie studio -- with an Internet portal. A source says Icahn has had discussions with one or more portals about combining the businesses and then spinning off the publishing and cable operations. And other sources confirm there have been discussions between Icahn's camp and IAC, the Internet company run by Barry Diller [and new owner of Ask Jeeves]. How could Icahn pry those businesses out of Time Warner using IAC, given that TWX is nine times bigger than IAC? That's unclear. It's possible that Diller, Icahn, and [Bruce] Wasserstein could come up with additional partners. [My emphasis]Right now Diller says the discussions are neither hot nor ongoing.

Is a discussion(s) between Icahn and Diller a surprise? Not really.

You probably remember that right before the Google/AOL deal was announced last month, Icahn issued a public statement calling that the Google deal a "disasterous decision," if it, "makes it more difficult in any way or effectively preclude a merger or other type of transaction. In a statement he specifically mentions the names of four companies:

IAC/InterActive
eBay
Yahoo
Microsoft

Icahn's statement added: ...a recent Goldman Sachs report concludes, "In contrast to the conventional perspective, we believe that eBay, followed by InterActive Corp, would provide greater incremental benefits to AOL's option value with fewer conflicts of interest than Yahoo! while MSN and Google would provide the least incremental benefits."

Interesting days indeed. Stay tuned.

Posted by Gary Price at 11:56 AM | Permalink

December 28, 2005

Revisiting The "No Banners On Google" Declaration

I wrote previously of Google promising that the terms of its deal with AOL wouldn't see a flood of banner ads flowing onto its pages nor the selling out of Google's principles. But I still felt there was some "wiggle room" in that "no banners" isn't the same as "no graphical ads." Now I've had a chance to talk with Google. Yes, banners are pretty much out. However, other graphical units might still happen. Here's a rundown from my conversation today with Google's Marissa Mayer, vice president of search products & user experience, who took time away from her vacation to talk.

"There will be no banner ads on the Google homepage or web search results pages."

That was Mayer's declaration last week on the Google blog. Pretty much, that's the case. There are no plans for banner ads on the Google home page that everyone who is not logged into Google sees. That's primarily because Google doesn't feel banner ads -- or other types of ads -- can be well targeted to those users.

"We don't believe in untargeted ads, so how are we possibly going to serve a targeted ad on that page?," Mayer said, explaining that someone coming to the Google home page has communicated no information of what they might be interested in.

However, the Google Personalized Home Page is another matter. That service is available to anyone who sets up an account and logs in to Google. For these people, Google does have a better idea of what they might be interested in. Because of that, ads -- including graphical ads -- makes more sense.

"On the personalized home page, we do know things about you, what weather you're looking for, what stocks, what news. So it's more plausible to me," Mayer said. However, she stressed that there are no immediate plans for ads of any type.

"We're probably a good six months to a year away from even thinking about this. The entire focus now is on building a user base," Mayer said, adding that the top priority right now is to improve the usability of the personalized home page service.

When and if graphical ads should come, there's a slight chance they could be of the banner format. But far more likely, they'd be something completely different, Mayer said. Google would be looking for a display unit that was fresh and worked well with the geometry of that page, which currently uses a more rectangular "module" format.

How about search results pages? Banner ads were ruled out for those in Mayer's declaration, but in my article about that, I'd mentioned I'd heard from another reporter that non-banner graphic units might be coming. That was Elinor Mills, who now has her own article out today about them and other issues: What the Google-AOL deal means for users.

Yes, non-banner units may be coming to Google search results pages, Mayer said.

AOL raised the idea with Google of some type of icon-like display unit that might run in conjunction with text ads and which might be helpful in building brand recognition. Google's agreed this is something that might be tested.

At the moment, the idea is to perhaps run very small 16x16 pixel icons that might be associated with an ad. To illustrated how small these are, I've taken an actual AOL text ad running on Google and inserted the AOL logo next to the ad headline. Before I show that, let me stress:

THE EXAMPLE BELOW IS NOT, NOT, NOT ANYTHING OFFICIAL FROM GOOGLE, OTHER THAN THE PROPOSED SIZE OF THE GRAPHICAL UNIT.

Official AOL® Signup Download AOL® Internet. 50 Days Free Trial! www.Free.AOL.com

How exactly the icons would be place may not happen as I've shown above. They might not appear at all. I just wanted to give everyone a visual representation of how big -- or really how small -- the icons being discussed are.

Mayer also stressed that there is nothing in the contracts that requires Google to carry graphic units of any sort on the search results page. It simply something that's come up in the discussions and that Google may experiment with.

Should Google decide icon treatments are successful, Mayer said they won't be exclusive to AOL. Any advertiser would be able to use them, as well.

Icons added to search listings wouldn't be new. AltaVista Listing Enhancements are a classic example of a somewhat similar program that came out in November 2001. They never really took off, in part I felt because they were only available to paid inclusion customers. I can't recall when the program formally ended.

Outside web search, banner ads sold by AOL might come to Google Video or Google Images. The contract does allow for AOL's ads to show up on "suitable" Google properties, and both of those are given as examples -- though that's not a requirement that they must carry them.

Part of the deal covers Google showcasing AOL content in Google Video search. I worried earlier that this might mean coming into the Google Video home page and finding that there's an entire area devoted to AOL on the home page.

Mayer said exactly what will happen remains to be determined, but nothing of that magnitude I worried about seems to be in the works. Instead, it's likely that AOL -- along with a number of existing content partners -- will be allowed to have small logo treatments on the bottom of the Google Video home page. There might be text saying that content in Google Video is provided in part through partnerships with AOL and the other providers, and clicking on the logos would bring users into just content from those providers. Mayer said that all providers, not just AOL, are looking for brand visibility of some type. That's why this wouldn't be exclusive just to AOL.

The last big issue in the deal was the provision where Google says it has "agreed to assist AOL and Time Warner in understanding our published and/or publicly available tools for improving the accessibility of a web site?s content to Google's web crawlers."

Some have worried this means Google will be helping AOL rank better, perhaps by giving them ubersecret insight into their technology. I worried less about that, at least in the sense that Google already has been working with a variety of companies to give them indexing advice. In the same way, Google spends plenty of time doing the same at conferences and in online forums.

The concern on my end had been that previously, providing some of this advice as part of an ad deals leaves it open for the lines between church and state to seem blurry. The same happened with the AOL deal. Including editorial support and advice as part of that meant Google had to respond that it wouldn't do anything for AOL beyond what it would do as part of its overall mission to gather content.

So why put this in the agreement at all? Why, if it's something Google would do anyway, allow it to go into a business document that caused questions to be raised of impartiality?

Ultimately, it was a pragmatic decision, Mayer said. AOL especially wanted reassurance in the contract. Since Google was going to do this type of work irregardless of the contract, including it simply was being practical.

For AOL, Google will look at doing some special work to index content that isn't in HTML format or other formats readily accessible to its crawlers, Mayer said. However, that work will ultimately benefit anyone with similar content, Mayer said. Similarly, Google already works with a variety of publishers with content it would like to access but where special needs are required.

Mayer added that the provision AOL asked for was virtually identical to one Yahoo wanted when Google became its search provider back in 2000, before Yahoo shifted to its own technology. Yahoo naturally wanted to ensure that if it was going to have a search engine powered by Google, that search engine would include its own content.

Want to discuss or comment? Visit our forum thread, Google To Hold On To AOL.

Postscript: Hey, Jen reminds me that Google's already experimented with icons in text ads before within its contextual AdSense placements. She's got more in Advertiser favicons being used in AdSense ad units and screenshots which look very similar to what I was guessing at. In fact, the logo I used for AOL was the favicon they show when you go their site -- and favicons were what AdSense seemed to be pulling from.

Postscript 2: John Battelle was talking with Marissa as well today and posts his own take over in Interview: For AOL/Google, The Devil Is In the Details.

John's focused mainly on the possible inclusion of AOL content into Google OneBox results and how deals for those are done generally. However, it pretty much comes out that Google's not been doing deals for "OneBox Providers," if you will, which was pretty much my understanding. They've always seemed to just pick people they think have useful content and link over without requiring a business arrangement. AOL is a departure in this, in that it is promised to be included in relevant OneBoxes where they have "a materially equivalent service."

Marissa stresses to John, as she did with me, that many of the details are still to be worked out. I also covered that earlier in Google's AOL Stake Rolling Into Holding Company It Can Take Public In 2008 from last week. Details are expected to be sorted out by the first quarter of next year, with binding arbitration to be used if agreements can't be reached.

John also gets into how the deal was negotiated and one. The turnabout, according to the Wall Street Journal, was because the Microsoft deal was too complicated and the search engine and ad tech too new. Google was seen as the safer choice. A commenter on John post also points to this good follow-up piece from the WSJ.

Posted by Danny Sullivan at 2:00 PM | Permalink

December 23, 2005

Google's AOL Stake Rolling Into Holding Company It Can Take Public In 2008

I got a research note from Ben Schachter over at UBS Investment Research flagging that Google has now filed an 8-K form on the AOL deal that sheds light on some new details, include rolling its AOL stake into a new company that it can take public in 2008. You'll find the filing here. Highlights below:

Some of the exact details of the agreement are still being worked out. That's expected to complete the first quarter of next year.
Should some details not be agreed, a resolution will be reached through binding arbitration.
Google is going to hold its 5 percent share of AOL through a new limited liability company (either called HoldCo or that being the term used to indicate a yet to be named holding company)
Google can sell the HoldCo interests in a public offering as of July 1, 2008 or afterward (so you're were right, John -- it is a second IPO, but in a different way than you thought!).
AOL can prevent a sale by exercising its right to purchase HoldCo from Google at an appraised fair market value.
The deal runs for five years, substantially longer than any previous deal Google and AOL have had.
It covers AOL being able to sell text ads on its own site in addition to carrying the same type ads from Google.
It covers AOL being able to sell display ads on the Google network.
It covers AOL being promoted on Google "consistent with Google principles," plus AOL receiving ad credits.
Google will fund marketing efforts for AOL through third party media outlines to promote agreed upon properties.
It covers the previously promised help for AOL and Time Warner to understand how to be indexed by Google better: "We have agreed to assist AOL and Time Warner in understanding our published and/or publicly available tools for improving the accessibility of a web site?s content to Google?s web crawlers."
Google Talk users will have to register their names with AIM in order to interact with AIM clients.

Posted by Danny Sullivan at 10:42 AM | Permalink

Google Says Don't Worry, AOL Won't Change Us - But There's Wiggle Room

Seeking to reassure searchers that Google has not sold out to gain the AOL deal, About the AOL announcement from Google vice president of search products & user experience Marissa Mayer offers words of reassurance, as well as a flat out denial that Google will ever have banner ads on the Google home page or search results. First of all, it's nice to see Marissa's finally gotten a better title and VP status! But now let's talk wiggle room.

First, the statement on banners:

There will be no banner ads on the Google homepage or web search results pages. There will not be crazy, flashy, graphical doodads flying and popping up all over the Google site. Ever.

So there you have it. Couldn't be more clear cut and hard to reverse, if they change their mind. But the key word here is "banners," which means those horizontal ads typically at the bottom of the page that many learned to ignore after they powered the early growth of the web. You know, like you'll find here on the types of image ads Google itself puts on sites across the web.

Notice there's lots of other ad formats. Why, there are big leaderboards. There are long skyscrapers. How about a medium rectangle? None of these are banners; none of these technically are ruled out by the promise today.

I'm going to follow up with Google on this. My assumption is that "banners" was probably something used quickly and in a shorthand way to mean large, graphical stuff isn't coming to Google and specifically the Google home page and web search results (other parts of Google aren't ruled out by this ban)

Having said that, I just talked with a trusted reporter who tells me that the idea of thumbnails or small graphical images associated with text ads may very well come. Again, I'm doing follow-up -- but if these do come, saying you won't do banners or "crazy, flashy, graphical doodads" probably wouldn't apply to these types of units. There's wiggle room for them.

I've already covered earlier why some small use of graphics wouldn't necessarily be a bad thing. But if they should come after what seems a flat-out statement, that's going to raise some eyebrows.

It's also worth reminding that Google has already -- and for some time -- run graphic units to promote both its Google Desktop and Google Toolbar applications on its search results pages. John Battelle gives you a screen shot of the toolbar promo here from October, but that had already happened previously months before, as well. Here you'll see a similar promo for the Google Desktop from back in March -- and I could swear I've seen this or the toolbar ad come up for me last week.

As for the Google home page, it's also worth remembering that Google's put graphic units there as well. Here's an example of that toolbar ad on the Google home page from back in October, and that's hardly the first example. It's not a new thing. It's just a sporadic one.

Finally on image ads, Google's said previously that graphical ads might show up on Google Images and Google Video as part of the deal. So while "crazy, flashy, graphical" stuff may not be on the Google site, other graphical stuff deemed relevant, useful and non-intrusive probably will.

Beyond image ads, Google reassures that results themselves won't be skewed to favor AOL and that "indexing more of AOL's content" is just part of the overall mission of including "all the world's information."

Sure, I believe that. But here's the thing. If Google's doing what it does for everyone, then it should have never -- ever -- been put into the press release on the deal. It's either a business deal arrangement or not. If it's just normal stuff -- which I fully believe will be the case -- then don't let your partner talk it up to score points with investors. Don't sell out in that way, if only that you then have to backtrack to reassure your own users you're really not selling out. By this measure, someone buying AdWords for Google might as well run a release saying that they expect Google will also be working with them to improve content indexing.

The issue of ad credits AOL is getting is addressed, with reassurance that while AOL has some credit to spend, that won't let it necessarily jump ahead of anyone else. Of course, $300 million is a lot of credit to spend, and AOL may not be as concerned about ROI impact as many of Google's regular advertisers are. It'll change the marketplace at least a tiny bit, but fair to say, not in the way of giving AOL some type of favoritism.

What's not addressed is the promotion of AOL video content. Google's going to showcase AOL content in Google Video in some way. I first heard of this when Saul Hansell of the New York Times told me about the plans, when talking with him for a story he later wrote. But the video arrangement didn't show up in his story, so I assumed it was a rumor that Google discounted when he followed up with them. Then in Elinor Mills' article at News.com after the formal announcement, the mention of showcasing was there.

Go to Google Video now. There are two tabs on the home page, with the default to show you popular stuff right on the home page -- which at the moment I assume really is popular stuff based in some way on search activity.

What's the showcase arrangement going to do? Am I going to get "Featured Videos" on the home page now like over at Yahoo Video, where I'm almost certain the only thing making them "featured" is arrangements with content providers?

If so -- or if AOL gets any type of presence on the Google Video home page at all -- that's a radical departure for Google. It has never to my knowledge given a company any type of preferential treatment of that sort, other than perhaps the deal to use Answer.com as the default dictionary provider. But with Answers.com, Google can at least fall back to say that they've done a review and think they are the best provider. Why would AOL be featured? Yes, they've got great content. But not because they are the best provider. It's because a business deal was struck.

As I said, I'm doing follow up here, to the degree I can during the holiday period. It's easy to speculate and worry now, while my preference is really to see what they actually do. The reassurances from Google are good, and they've got a long history of being careful to protect the user experience and the impartial quality of dealing with content. But having said that, they are having to put out such reassurances now quite simply because they allowed doubts to be introduced when the deal was announced. A statement like this from Time Warner in the release:

A critical piece of this strategic alliance will be our content, which we will be making more accessible to Google users.

is now forcing Google to do damage control in the way we haven't seen since Google CFO declared clickfraud being a big threat a year ago. If Time Warner content is important to Google users, it should have been included already before this deal. It definitely shouldn't have been mentioned as part of it, generating doubts that other content won't be as accessible.

Posted by Danny Sullivan at 8:20 AM | Permalink

December 20, 2005

Google/AOL Deal is a Go: AIM and Google Talk To Become Interoperable, White Labelling of Google Ad Technology, and Expansion of Display Ads on Google Network All Part of "What's New"

Reuters is reporting that the deal $1 billion deal that has Google buying a 5% stake in AOL is a go after being approved at today's Time Warner Board Meeting.

A press release from Time Warner officially confirms it's a go.

The news release calls the deal an expansion of the AOL/Google strategic partnership that's been around for three years.

Here are some highlights from the news release.

What's new? In my original post from last week I wondered aloud if a this new AOL/Google deal would mean anything in the IM world where AOL's AIM is the market learder and the new Google Talk. Would interoperability be possibility? It looks like my thoughts were right along with what was being discussed between the two companies.

News release passages in italics: + Google Talk users and AIM users will be able to communicate with one another if, and the following is a direct quote, "if certain conditions are met."

+ Collaborating in video search and showcasing AOL's premium video service within Google Video I spent quite a bit of space speculating on what this might mean for AOL Video and Google Video now and in the future my post from last Friday. Between the two companies they sure have a good chunk of video search technology.

+ Creating an AOL Marketplace through white labeling of Google's advertising technology - enabling AOL to sell search advertising directly to advertisers on AOL-owned properties.

+ "Expanding display advertising throughout the Google network." Exactly what type of display ads and where they will be seen is not specified. Danny has blogged about Google and displayed ads (before this official announcement).

+ Making AOL content more accessible to Google Web crawlers. Again, what this precisely means was not made clear in the release. I guess placement of this content is what many of us are wondering about. Danny's article linked above also talks about the, "SEO advice Google already gives other large companies as part of the sales pitch and support to get them to buy ads."

+ Providing AOL marketing credits for its Internet properties.

Non-US AOL and Google have also agreed to extend the term of their existing European relationship, and, subject to mutual agreement, they may extend the AOL Marketplace internationally. In addition, Google, AOL and Time Warner may choose to expand the new partnership to Time Warner's other advertising opportunities.

Bottom Lines and Comments from Management: + "The agreement creates a global online advertising partnership, makes more of AOL's industry-leading content available to Google users, and includes a $1 billion investment in AOL by Google."

+ Google will become the only shareholder in AOL other than Time Warner. Google will have certain customary minority shareholder rights, including those associated with any future sale or public offering of AOL.

+ Time Warner Chairman and Chief Executive Officer Dick Parsons said: "We're very pleased to build significantly on our special relationship with Google in a way that will meaningfully strengthen AOL's position in the fast-growing online advertising business and help drive more advertisers to its Web properties...A critical piece of this strategic alliance will be our content, which we will be making more accessible to Google users."

+ "We've also created a simple way for AOL Marketplace advertisers to buy and place search-related advertising across the AOL network. This partnership is an important next step for our companies." --Eric Schmidt, Google CEO

+ "AOL and Google have a very successful history working together, and this is an opportunity to take it to a new level that will benefit both companies and the customers we serve. We are excited about working with Google on the next generation of AOL products, while further expanding our presence on the Web. This is a great moment for AOL." -- Jonathan Miller, AOL's Chairman and Chief Executive Officer

Additional Coverage From + News.com + Wall Street Journal (sub req.)

Posted by Gary Price at 6:47 PM | Permalink

More On AOL Pushing Google Into Graphic Ads & AOL Promotion

AOL Coaxes Google to Try Busier Ads from the New York Times dives deeper into details that emerged earlier this week about how Google will help promote AOL as part of the bid to retain the company as a Google partner, along with new graphical ads that will be coming to Google search results pages near you.

Google is looking to promote AOL content within a OneBox display area, something familiar to many of our readers, as we've written of them in the past. OneBoxes are where Google promotes other vertical search results that may be of interest to searches, such as news listings or shopping results.

AOL isn't being promised any exclusivity or guarantee to show up in these areas, and including material from other companies isn't even a radical departure. Google stock result OneBoxes already pull from various providers, for example. You can see how that works in a search for goog and the resulting detailed page.

Graphical ads appear to be in the works for Google's search results pages, though traditional banners might not show up except in Google Image Search and Froogle shopping search. The Google home page would remain without graphics. From earlier reports, it sounds like AOL will get some of graphical space to help promote its own sites plus have the ability to resell graphical ads on Google.

AOL is also getting SEO advice from Google. What?!!! Secrets on ranking better? No, it sounds more like the SEO advice Google already gives other large companies as part of the sales pitch and support to get them to buy ads. That's semi-controversial mainly with SEOs who feel the advice Google gives may undercut their oftentimes more detailed and better advice, simply because it comes with Google's own seal of approval. It also does blur the church-and-state divide a bit.

Overall, I'm sitting back until the deal is formally announced and people are talking on the record about it. That's likely to happen today. Then I'll dive back in and look more closely at what's being offered and what lines, if any, are being cross. In the meantime, some further reading and a semi-scorecard to date.

1) OneBox inclusion of AOL content probably doesn't harm Google's reputation for impartial results if AOL isn't promised any particular placement or exclusivity.

2) Graphical ads will definitely cause some purists -- and maybe even some ordinary Google users -- to raise eyebrows and perhaps feel Google has sold out. Expect that Google may likely make the display of these an option, on by default but easy to switch off. That will help, but overall, graphical ads I'd say will be seen as a sign that Google's just like "all the other" search engines and losing some of the magic some feel it has.

3) Google Thinking Flash Ads? covers what may have been some testing in preparation of running graphic ads in search results. Google Offers Banners & Image Ads -- But Not On Google Itself from last year covers the graphic ads that Google rolled out for contextual placement. At the time, Google did say partners might also eventually show these in search results. Whether these ads would come up on Google itself wasn't addressed. I don't think Google has ever completely ruled out the idea of graphical ads, but they do seem to conflict with part of its corporate philosophy:

Google has also proven that advertising can be effective without being flashy. Google does not accept pop-up advertising, which interferes with your ability to see the content you've requested. We've found that text ads (AdWords) that are relevant to the person reading them draw much higher clickthrough rates than ads appearing randomly.

A CBS News interview last year did have Google's director of technology eschewing banners:

"The focus that Google has on our users, you know, a very slim homepage and so forth -- text ads, not banner," says Silverstein. "We do that because we don't want to go to sites with banner ads. We don't like them."The focus that Google has on our users, you know, a very slim homepage and so forth -- text ads, not banner," says Silverstein. "We do that because we don't want to go to sites with banner ads. We don't like them."

Certainly the oft-cited person who diagnosed himself as having a heart attack after doing a Google search might not be thrilled about graphical ads coming. They slowed him down during his crisis and made Google a winner to him for not having them. From what he sent Google:

On Monday morning, as I started my workday as a Web developer and designer, I felt a pressure in my chest. Being 52 years old and somewhat familiar with the early warning signs of a heart attack, I thought I'd go online and check on the early signs of heart attack and stroke. My initial quest lead me to 'Blah, Blah, Blah'" ? which is a different search site which I won't mention the name of ? "wherein I entered the search terms 'heart attack symptoms'.

As I waited for the banner ads to download, and then the content, I became more and more anxious. I turned to Google. I knew from prior experience that I could expect the quickest search results possible, and I was not disappointed. In less than a tenth of a second, the top listing led me to the American Heart Association Web page. Their easy to understand graphics and descriptions lead me to acknowledge my predicament, and I went to the local hospital where I commenced to have a full-blown heart attack.

Thirty-six hours later, just prior to emergency, triple-bypass, open-heart surgery, my doctor told me that had I had a stroke at any time while waiting for the operation, the chances were great that I would not have survived. This was a very sobering thought to me, my wife and our three sons, who thought they may have seen the last of their dad. Simply put, had I putzed around waiting for another website to display interminable graphics and banner ads, I might not be here today. Instead, I wanted immediate results, got them from Google, and for once did the right thing by going to the hospital."

I expect that if graphic ads do appear, you'll see the Google philosophy page be adjusted to structure graphic ads as being relevant in the right situation, just as Google has changed that page in other ways to accommodate portal features it has added. Google's Philosophical Ten True Things Not So True Anymore? and Google's Philosophy: Then and Now cover those adjustments more. But overall, I don't disagree with graphic ads as being useful. They can be, especially for those who are seeking to build brand. Chris Anderson had an interesting post recently on how he's using AdWords not for clicks but to build awareness. Big Guys Crowd Out Little Guys in SEM Arena; Some Branding Focused Advertisers Willing to Spend "Whatever" It Takes, Don't Hate Search, Search May Not Be From Branding, But It Will Still Pull Branding Spend, and Search Ads Used By More Than "New Breed" Advertisers are just some past blog posts that cover how brand owners are looking at search to boost their properties. They aren't necessarily crazy or irrational spenders, either. C'mon In Brand Owners, The Search Water's Fine explains this a bit more. But in short, they're looking for something other than direct conversions, are willing to spend and it's only natural that search engines will have to react to this demand.

What we don't want, however, is a repeat of the days such as when Yahoo was partnered with Amazon. Old timers will recall how every search at Yahoo used to bring up an Amazon box in the right hand column. It was ever present, annoying and quickly ignored. If AOL is promoted this way -- or if brand ads from others aren't targeted well -- they'll also become annoying and ignored.

4) The AOL deal will raise awareness of advice Google is directly giving to some major advertisers, as I covered in my earlier Google SEO Support Given To Advertisers. While that still doesn't appear to be crossing the church-and-state divide, it is blurring the lines more, something that Google may regret down the line unless it can provide more support services to everyone.

Want to comment or discuss? Visit the Google to Hold onto AOL thread in our Search Engine Watch Forums.

Posted by Danny Sullivan at 8:56 AM | Permalink

December 19, 2005

Time Warner Investor Works to "Derail" Rumored Google/AOL Deal

Legendary investor, the 24th richest man in America, and a major holder of Time Warner stock, Carl Icahn, is not happy with the rumored AOL deal with Google and according to this News.com story*, is working to "derail" the deal.

From the article: "Like all shareholders, I am not opposed to Time Warner entering into an AOL transaction that creates long-term value. However, I am deeply concerned that the Time Warner board may be on the verge of making a disastrous decision concerning an agreement with Google if this agreement would make it more difficult in any way or effectively preclude a merger or other type of transaction with companies such as (InterActiveCorp), eBay, Yahoo or Microsoft." Icahn wrote in an open letter to the Time Warner board of directors.

The full text or Mr. Icahn's letter is available here.

The letter includes the following paragraph where Icahn questions of Google is the best partner for AOL: I also question whether Google is the best partner for unlocking the value of the AOL asset. Indeed, a recent Goldman Sachs report concludes, "In contrast to the conventional perspective, we believe that eBay, followed by InterActive Corp, would provide greater incremental benefits to AOL's option value with fewer conflicts of interest than Yahoo while MSN and Google would provide the least incremental benefits."

Icahn has been building support for a proxy fight to split AOL off before last Friday's news.

Icahn's letter goes on to say: The real risk for Time Warner shareholders is that a Google joint venture may be short sighted in nature and may preclude any consideration of a broader set of alternatives that would better maximize value and ensure a bright future for AOL.

Once again, I am not opposed to the Board using its business judgment to enter into a transaction with Google or another suitor so long as the transaction does not destroy or impede Time Warner's flexibility to unlock shareholder value in the near and long term.

We should know more later this week afer the Time Warner Board Meeting.

More coverage of the possible Google/AOL deal is available here.

* Postscript: On Jan. 24, 2006 I noticed that the live version of the News.com story was no longer available. That's why we are now linking to a cached version.

Posted by Gary Price at 4:11 PM | Permalink

December 16, 2005

Sorry Bill and Steve, WSJ Reports Google Near $1 Billion Deal With AOL

If Gates and Ballmer wanted a deal with AOL (Time Warner) as a Christmas gift, it appears that they're not going to get it. The MSFT vs. GOOG game of the "Price is Right" appears to be ending according to this just posted story from the Wall Street Journal: AOL Nears Deal With Google (sub req).

Here are a few key facts and passages from the article by Julia Angwin, Kevin J. Delaney and Dennis K. Berman:

+ AOL and Google are now in "exclusive negotiations." Microsoft has been "shut out" of the negotiations at this point.

+ Google will pay $1 billion for a 5% stake in AOL.

+ "AOL would be able to sell advertising among the search results provided by Google on AOL Web properties." At the moment, sponsored links come from Google...AOL's sales staff would also sell display ads across Google's network of Web publishers."

+ "Google will promote AOL's Web properties among the sponsored links in its search results, and will include AOL's collection of online videos among its search results. Google's arrangement to provide search technology for AOL, which was set to expire at the end of next year, would be extended for five years."

+ Don't look for a deal and/or an announcement until next week after a Time-Warner board meeting.

With multimedia search being one of the hot topics of 2005, I find it interesting that AOL Video, which we've been talking about a lot this year both in terms of content and UI, will be visible in Google results in one form or another. It's obvious that video and video search have been a high priority to the company over the past year and they've done some impressive work. AOL has easy access to lots of video content from Time-Warner, deals with other providers, and also its own multimedia crawler with SingingFish. It will be interesting to see (no pun) if any exclusive video that Google has would/will begin appearing on AOL? Also would future deals that both companies make for video content be made so the material would be accessible on both services? Will the AOL Video database of crawled video content continue to use SingingFish technology or will Google begin to using the SingingFish crawler?

Btw, don't forget that AOL is currently testing (it works great for me) the delivery of high-quality videos while your computer is quiet.

I'm also wondering about future issues with Google and AOL in the instant messaging space. AOL is the leader. Will Google Talk become interoperable with AIM, so the two systems and their users can chat or talk to each other? Earlier this year, MSN and Yahoo announced a deal that will allow users of either service to chat with each other. Would the AIM and Google Talk tech be merged? I could go on with VoIP, broadband, wi-fi, cable tv, and all sorts of other stuff but let's not get way ahead of ourselves.

From the SEW Archives: + Overture & Inktomi Out, Google In At AOL (May 1, 2002) + AOL Moves Fully To Google (August 5, 2002) + AOL Renews With Google (October 8, 2003)

Want to discuss? Check this thread in the SEW Forums.

Postscript: Reuters has now published a story on the still yet to be announced deal. The Google-AOL talks would expand on a relationship which analysts estimate account for 2 percent to 4 percent of Google's revenue on a net basis. AOL uses Google's search engine

Postscript 2: Perhaps the most interesting part of all of this is found (via Searchblog ) in this coverage from the NY Times that says that Google will give AOL preferred placement on the Google site.

Here's the passage: Google, which prides itself on the purity of its search results, agreed to give favored placement to content from AOL throughout its site, something it has never done before.

Does this mean "favored placement" of ads or of organic results? I think before starting to speculate we need to know more on just what Google is thinking here. If Google would start giving "favored placement" for organic results then it would sure be a "wow" moment/change of direction in Google's history. From an advertising standpoint it would be interesting to see how the SEM community would respond. Battelle uses the expression "jump the shark" to describe the NYT passage in his post but adds that it also just might be a "trial balloon."

Of course, it's very unlikely we hear anything official about any of this until next week.

Postscript 3 (Saturday): David Vise's article from the Washington Post on the possible deal. From the article: + AOL also will get the exclusive right to sell online banner ads for Google. AOL will keep about 20 percent of the proceeds from those ad sales, while Google will get about 80 percent.

+ "AOL is a valued partner," Google spokeswoman Lynn Fox said yesterday. "We look forward to continuing to work with them."

+ AOL has provided Google with more than $400 million in ad revenue so far this year, according to public filings.

+ The existing arrangement -- under which Google provides text-based ads and free search results on AOL -- will continue, with AOL keeping 80 percent of those ad proceeds and Google taking 20 percent.

+ One source said AOL will also have the right to buy graphic ads that appear alongside the text-based ads Google traditionally has displayed to the right of its free search results.

+ Google's search results, based on equations that rank them according to relevancy, will not be changed as a result of the new partnership with AOL, sources said.

Postscript 4: See AOL's Choice of Google Leaves Microsoft as the Outsider has more details on AOL having concerns over MSN's new ad network and arguing that its own ad serving software was beter.

Posted by Gary Price at 12:44 PM | Permalink

December 7, 2005

Google and Microsoft Play "The Price is Right" with AOL

According to a Reuters story (via News.com): Microsoft, Google still vying for AOL: that proposals from both Microsoft and Google have been submitted to AOL to "strike an internet advertising partnership" with the company.

Julia Angwin And Kevin J. Delaney in the WSJ (sub required) write: People familiar with the matter said that under the proposal being discussed, AOL, whose current ad partner is Google, would switch to using Microsoft's search engine, and the two companies would set up a joint venture to sell online advertising across both AOL and Microsoft's MSN portal. The services would remain under control of their respective owners, but their ads would reach many more online customers than they do now, these people said.

But Google remained in its own partnership talks with Time Warner late yesterday and still could emerge on top, these people cautioned. A sticking point so far has been its reluctance to guarantee Time Warner a minimum amount of revenue, which Microsoft has done, said one person familiar with the talks.

Reuters reports that at least another round of negotiations are likely and we might learn of a final decision by Christmas.

In other talks, Comcast Corp., which sources said was considering a joint deal with Google, is now also seeking a separate arrangement with AOL, regardless of the outcome. The top U.S. cable operator is discussing how it can market its high-speed Internet service to AOL's dwindling but still large dialup customer base, among other topics.

Micrsoft CEO, Steve Ballmer, while in DC remained quiet on any sort of deal but said:

Online advertising is of keen interest to us, and I have absolutely nothing to say about the AOL deal or (any) deal whatever," Ballmer said. "If you ask, particularly our consumer-facing businesses, what will be the most rapidly growing revenue stream at Microsoft, it's absolutely going to be advertising.

Posted by Gary Price at 1:34 PM | Permalink

November 14, 2005

November 7, 2005

Microsoft Said Leading The Race For Part Of AOL

Many Suitors, and Pitfalls, as AOL Seeks a Partner from the New York Times says Microsoft is now the "front runner" in a potential sale of a stake in AOL.

The article highlights comments from Microsoft chair Bill Gates last week saying that interest is more about having a "greater role" in the future of advertising, suggesting as we and others have said before, that this may be more about landing increased distribution for Microsoft's new paid search program but outing AOL's current partner, Google.

The article also says the AOL-Google deal is up for renewal each year. If so, that's news to me. AOL has never said how long the last deal it signed with Google would last, but it was very, very clear when I talked to them about the deal when renewed in October 2003 that it was a multiyear agreement.

My best estimate has been that the deal would be up for renewal in October of this year, since past deals have typically lasted about two years.

Posted by Danny Sullivan at 7:02 PM | Permalink

October 17, 2005

Blogpulse and AOL Annouce Deal

Our friend, Pamela Parker at Clickz reports on a just announced deal that will bring "daily blog data and trend analysis" to AOL provided by Intelliseek's Blogpulse which also operates its own blog search tool.

Wow, AOL is sure jumping on the blogging bandwagon of late:

October 6th--AOL to Buy Weblogs Inc.
September 14th--AOL Adding Podcast Search Tools
July 28th--AOL Offers Personalized Home Page, RSS Feeds (Note: Feeds powered by Feedster)
Note: An item on the "What to Expect" page from AOL mentions that "Feed Search" will also be coming to the service.

Posted by Gary Price at 12:34 PM | Permalink

October 14, 2005

Now It's Yahoo's Turn to Make a Play for AOL

Surprised, nope. The way it's going, kids will soon be asking their parents for AOL for the holidays. No, not the service but for mom and to make a bid for a part of the company.

According to Julia Agwin and Kevin Delaney from the WSJ (sub req), Yahoo is joining Microsoft, Google, and Comcast and making a play for at least a portion of AOL.

A person close to the situation says that Yahoo is interested in luring AOL users to its search engine.

And I'm sure along with the search engine aill also go YSM ads. (-:

Yahoo isn't talking.

Btw, another reason this isn't a surprise is that the original story about the Microsoft/AOL talks in The New York Post said that AOL was also talking with Yahoo and Google.

More in Sandy Brown's story: Yahoo! Joins AOL Chase from The Street.com and Yahoo! said to eye AOL, too from CNN/Money.

Posted by Gary Price at 5:13 PM | Permalink

September 23, 2005

Time Warner Keeping AOL

Via Threadwatch, Time Warner Head Says AOL Is the Company's Future from the New York Times covers how Time Warner sees AOL as a key asset for Time Warner to improve, suggesting that it's not going to sell some or all of it to MSN. We do know that MSN and AOL have been talking. That's not a surprise. Next month is the earliest date I can estimate that the Google deal to power AOL's search may expire. MSN would obviously like to grab that audience share as a way of further enticing advertisers over to its new ad system that's slowly being rolled out. Naturally, Google would love to keep that business and will be making all the right overtures to AOL. You can also expect Yahoo will be talking to try and gain back an important traffic source it lost to Google years ago -- and Ask Jeeves will be doing some talking, as well.

Posted by Danny Sullivan at 7:22 AM | Permalink

July 28, 2005

Feedster to Power RSS Portion of New "My AOL" Service

This morning, AOL is rolling out its new personalized home page service called My AOL. Like most AOL services these days, you don't need to be an AOL subscriber to use it.

The first My AOL feature that's now available allows users to build and maintain a personalized page of RSS/XML feeds. This service is powered by a new partnership between AOL and Feedster, an RSS/XML search engine. Financial terms were not disclosed.

Chris has more about the new service in today's SearchDay article, AOL Offers Personalized Home Page, RSS Feeds.

Posted by Gary Price at 1:01 AM | Permalink

June 9, 2005

AOL Makes Deal for Yellow Pages Listings

The Business Week article: YellowPages Goes for Gold on AOL, takes an in-depth look at the SBC-BellSouth to supply Yellow Pages listings to AOL.

The deal gives the Bells the ability to tell advertisers who use both the print and online Yellow Pages that their ads will reach more people for about the same price. "We're a media company, and our goal is to build the largest audience," YellowPages.com CEO Charles Stubbs said in an interview before news of the AOL deal broke. The joint venture has similar deals with Yahoo and Infospace (INSP).

AOL gets more complete listings of local merchants, giving surfers a reason to choose its Yellow Pages product over Google or Yahoo, as well as ad revenue. In effect, the pact gives AOL a cut of the efforts of the 4,000 sales reps working for the printed Yellow Pages published by BellSouth and SBC.

Posted by Gary Price at 12:57 PM | Permalink

January 4, 2005

AOL Will Use Fast Search and Transfer Technology

Enterprise search player (and former owner of AllTheWeb) Fast Search and Transfer has started the new year much like it ended 2004, adding new big name clients. A brief news release (also picked up by Reuters) informs us that the America Online has signed a contract to use Fast ESP, "across multiple applications throughout the organization." Precisely where the technology will be used (internal databases or external, publicly accessible databases) was not disclosed.

About a week ago, Fast announced that their technology was licensed by Factiva, a fee-based news and info database that is owned by Reuters and Dow Jones.

Posted by Gary Price at 6:12 PM | Permalink

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