Reports have emerged that Google has set its sights squarely on an AOL search deal as its next major strategy.
According to Nicholas Carlson, who reported on plans via the Silicon Alley Insider site, Microsoft will struggle to outbid Google on AOL’s search business.
Sources close to Google’s Mountain View HQ are suggesting Google will take a very aggressive strategy into negotiations, making it almost impossible for competitors to get a look in.
The current deal between Google and AOL is due to end shortly and Tim Armstrong, AOL’s CEO has openly said he’s accepting offers from all parties.
The deal has been obviously been lucrative for both parties, but Mr Armstrong is looking to change some of the conditions during the renegotiations. One of the key changes is the ability for search ads to link to AOL content rather than always pointing to search partner’s advertiser content.
In terms of a search deal, that could throw a spanner in the works. Google will be wary of any restrictions which significantly impact the revenue potential of the deal.
AOL’s viewpoint was summed up well by a statement by Tim earlier this year:
“We’re the largest music content provider online. It may be more strategic for us to put less ads on a search page for outside partners and put more distribution to our music properties on that search page. We can monetize the music traffic and a different part of AOL services with display ads.
[The deal] doesn’t just have to be good for the search part of the business. There are other things in the search deal that we may or may not trade off for search money.”
Given the volume of searches the AOL produces, Google might be prepared to compromise a little to secure the deal. It’s a case of losing a battle to win the war. We’ll have to wait and see if Microsoft has anything up its sleeve.