Friday, October 07, 2005

Time Warner, Microsoft resume Net unit talks - Internet Services - Internet - General - M&A

Time Warner, Microsoft resume Net unit talks - Internet Services - Internet - General - M&A

The mashup of AOL and MSN would make the two companies into a strong third horse in a two horse race. Google continues to lead and even gain market share in world wide search. Yahoo continues to add substantial proprietary locals that give it solid advertising growth. AOL has the content but has not monetized it. MSN has failed to crack the market! It is pretty amazing that MSN can steam roll this market the way it has so many in the past.

AOL members currently use Google search. MSN countinues to try to grow its search business and would love to serve the 21 million AOL dial up customers. The advantage to AOL has to be along the lines of the potential to monetize content that is not currently freely available on the net; how about all those magazines?

It would be so nice to be able to search magazines the way one can search the news. For the most part, even though some magazines are online, for the most part they are not very searchable. Yahoo has a deal with ADBE and magazines such as Business Week is available by online subscription using the PDF download format.

I subscribe to Business Week and to PC World but forget to read them. More of my news comes through Google than from any other source. It would seem that AOL might want to offer a "blanket subscription". The idea to make magazines searchable for a subscription fee.

The fight is similar to the ongoing developments in the book scanning wars. The consumer will be best served if he can view books online. The efficiency over actually checking out a hard copy at the library is huge. In the long run, "economics wins". Folks such as AOL can try to hide their media, keeping it off the internet in an attempt to keep hardcopy subscription sales high. This strategy will only lead to the gradual loss of market share. AOL is probably about ready to offer substantially more content, if they can gain control of the search engine. MSFT is ready to admit that they can't crack the search market alone but they do not want to give up control to AOL.

There has been talk of spinning off a new combined entity to give each player ownership of an independently run company. I am not sure that any of this matters much. The fact continues to be that Google and Yahoo are in the race and the rest of these guys are ridding nags. Interactive corp and its Ask Jeeves program is also in the also ran division. AMZN has a powerful seach engine but the 800 pound gorrilla continues to be Google .

Some folks say that someone will come along with a dramatic enhancement to search which will make Google into another Alta Vista. The reality is that Google has strung together 10 to 60 data centers and more than 100,000 computers in a highly efficient network. Inventing a new search algorithem better than the Google science would only be a small portion of the task to out Google, Google . AOL, MSFT nor Yahoo have put together the network that can match the GoogleNet. Google is well in front and gaining share. Eventually the share gains will level off. Perhaps because of a combination of MSN and AOL. Together these folks may be in sight of Google when it crosses the finish line.
More on the AOl & MSN merger:
World Adventurers
Om Malik
TheGoogle effect
A Good Idea