Google’s agreement to purchase a five percent stake in AOL was widely reported, but I missed the important detail: as part of the deal, Google agreed to start putting AOL-sponsored search results on its main search results page. Here’s Paul Thurrott’s description:
“Ignoring its “don’t be evil” corporate mantra, Google has forsaken its pledge never to let its search pages be subsumed by corporate interests. In striking out against a would-be competitor, Google has simply revealed itself to be as flawed as any other corporation.
“Here’s what happened. In recent months, Time Warner has sought suitors for its once-troubled AOL unit, hoping at first to find a company that would be interested in purchasing all or part of AOL. When that didn’t pan out, Time Warner turned to AOL’s ad-supported search service, which since 2002 has been powered by Google technology. Earlier this month, “The Wall Street Journal” reported that Time Warner was set to finalize a deal with Microsoft that would replace Google Search on AOL with the software giant’s MSN Search technology, with Microsoft and Time Warner splitting ad revenues.
“Then Google swept in with a last-minute offer that scuttled Microsoft’s plans. Google will pay Time Warner $1 billion for a 5 percent stake in AOL and will keep the AOL search business as a result. The deal, which was done solely to hurt Microsoft, will not financially benefit Google in any perceptible way. But as part of the deal, Google will do that one thing it’s always promised not to do: It will present AOL-sponsored search results on its main search results page, complete with the AOL logo. That’s right, folks. Google has sold out. And it did so to harm a competitor that has less than one third its market share.
“There are two key lessons here, from what I can see. First, Google is not the trustworthy corporate giant that some people imagine, though the company’s track record, including its close work with China’s totalitarian government, should have already made that clear. Second, Google considers Microsoft a huge competitive threat, despite the fact that the Redmond company has yet to make any serious inroads into Internet search.”
