Google’s $700 million search deal with AOL is expiring soon and rumour has it that AOL is looking to take its money elsewhere.
Speaking at the recent Fortune Brainstorm Tech conference, AOL CEO Tim Armstrong said that the companies next search deal will not be limited to Google and Microsoft. “Search is heating up from a multi-partner space—we are not talking to two companies.”
There’s no doubt that Google and Microsoft would be the main contenders but it’s interesting to see that AOL is keeping its options open.
At $700 million each year, there is even speculation that it would be cheaper for Google or Microsoft to simply buy AOL outright instead. AOL is currently valued at $2.25 billion.
While AOL is the fourth largest U.S. search engine, their market share is only 2.5%. If Microsoft were to be the winning bidder, then along with the combined Bing/Yahoo deal, the three companies would hold a total of 30% market share.
Something that it sure to keep Google interested in an AOL partnership is the click-thru numbers. According to Chikita, AOL searchers have the highest CTR of all engines. Their CTR for PPC ads is over two and half times that of Google. Given that paid ads are where the search engines actually make their money, Google can’t ignore these stats.
We will be sure to keep you posted once we hear who AOL chooses; we do know that it certainly looks to be a tight race.