What's All This Talk About AOL and MSN?

If you've visited any of the popular technology news sites, or discussion forums in the last day or two, you've likely heard the rumblings about a possible AOL/MSN or Google/AOL or even Yahoo!/AOL pairing that may be in the works. Sorting out the possibilities from all of the speculation can be tough, but the reality is that if any of these deals go through, there will be a significant impact on how people marketing online.

The story started yesterday when The New York Post ran an article that speculated about how Time Warner was in "advanced discussions" to sell a piece of America Online to Microsoft. The Post went on to explain that the move was designed to combine the AOL and MSN web properties in order to create a new super-sized portal that could easily compete with current industry leaders Yahoo! and Google.

Since then, The New York Times, Bloomberg and ClickZ have all covered the story. Perhaps the most worthwhile conversation to read is the debate between Search Engine Watch's Danny Sullivan and Yahoo!'s Russell Beattie at Beattie's blog. Some of the reasons that Microsoft would be interested in AOL:

• The obvious size advantage that would come with combining two of the most popular portal sites on the Internet. The combined power of MSN and AOL users would give both Yahoo! and Google a serious run for their money.
• Last year, 11% of Google's income came from their AdWords distribution partnership with AOL. A combined MSN / AOL site could drop the Google ads and replace them with inventory from Microsoft's own pay-per-click program.
• The combination of AOL and MSN internet services would create the largest Internet access company in the world.

For MSN and AOL, the move makes sense on so many levels. Microsoft is pouring money into their search technology, developing both their own algorithmic search and pay-per-click advertising services. Meanwhile, AOL has been doing a fairly impressive job of expanding their portal content and creating a strong destination site. The combination of the two could bring about a strong competitor to current portal leader Yahoo!. At the same time, the existing specialized search tools (local search, music search, video search, etc...) that AOL has been working on would be better able to compete with new services being released by Google.

Not everyone is thrilled with the idea, however. One cynic at Slashdot pointed out that a good slogan for the newly combined company would be: "Now combining all of the worst features of both into one incredibly tortured interface."

Of course both the good and bad are pure speculation on a story that is still in the rumor stages. Whether or not the merger will ever play out remains to be seen. That said, the buzz over the news shows how interested the industry is in the potential of a site that could honestly give Yahoo! and Google a run for their money on all fronts. Competition in the marketplace is a good thing...when it's not your marketplace.

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September 16, 2005