After months of dancing with a number of potential partners, Time Warner and Google made public the terms of their continued partnership yesterday, with Google, as expected, paying $1 billion for a 5% stake in America Online and $300 million in advertising credits for AOL to promote its content across the Google network. The deal also includes using AOL's 300-strong advertising sales force to sell ads on Google sites and integration between the two firms' instant messaging tools.Microsoft, which had also been negotiating with AOL, dropped out of talks, in a major blow to the Redmond, Washington Company. A deal with AOL would have cut off Google and provided a major advertising conduit for Microsoft, particularly for its AdCenter search engine, which it has spent $100 million developing. A partnership with Microsoft, whether total or partial, seemed to offer a number of tantalizing possibilities. A real third option in search, a power to challenge Yahoo! in CPM ads and a web traffic monster. Although this new deal with Google is to return AOL back into the vanguard of web companies, the biggest winner may just end up being Google!
More on this topic: CNET – 12/20 Google, Time Warner Strike $1 Billion deal
BusinessWeek – 12/21 AOL-Google: Who gets What
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