Google's Defense on AOL

Post ImageYou might recall that last week I mentioned there were rumors of Microsoft talking with Time Warner about AOL. At the time, I said it would likely be a play for access to the content that AOL controls, but it’s pretty clear now that Microsoft talking to AOL is more a business tactic – they want to eliminate the revenue Google gets from AOL. So news of a possible Google takeover of AOL should be no surprise:

Google could try to bid for America Online to preempt a Microsoft takeover and protect the $380 million in revenue Google gets from its biggest partner, according to an analyst.

“We believe it is entirely possible that Google could consider making a bid for AOL as well,” Lauren Rich Fine, an analyst at Merrill Lynch, wrote in a Friday report on the implications of an AOL-Microsoft Network deal. “This would certainly protect Google’s revenues from AOL as well as enable Google to keep 100 percent of the search advertising revenues as well as gain a significant amount of content.”

This is so much more exciting than Microsoft versus Netscape or any of the battles of the past, because Google has tons of cash too. Not as much as Microsoft, but enough to make things interesting.

Read: CNET News.com

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