Enter your email address:

Delivered by FeedBurner

About This Blog

Josh’s Tweet Stream

  • More tweets

« Yahoo intros Instant Search | Main | Google Talk’s potential – searchable conversations »

September 15, 2005

Rumors of MSN and AOL partnerships

By Charlene Li

The rumors are flying about MSN buying AOL, sparked by a story this morning in the New York Post (registration required) and fanned by WSJ.com. I think the WSJ has got the scenario correct, that these discussions stem primarily from AOL’s interesting in using MSN’s algorithmic and paid search platforms. AOL currently uses Google and the company has been forthright in discussions with me that they will partner for search technology, rather than build their own. I think this is a very smart strategy, as it allows AOL to strike the best technological AND business deal in an ever changing marketing. So at a minimum, we might see AOL switching over to MSN for search technology and ads.

During these discussions, it’s inevitable that MSN and AOL also discussed other ways they can cooperate, especially the idea of combining advertising sales forces on the branding side. As the #3 and #4 portals behind Yahoo and Google, they will need all the fire power that they can muster.

So in theory, it makes a lot of sense to combine the two operations, especially on the back end. But merging the two actual portal consumer experiences into a unified site will be a nightmare. Cooperative ad sales can happen through partnerships and a full out acquisition would be difficult for MSN to absorb. Moreover, while both serve a more mainstream customer than Yahoo and Google, they have very different experiences. AOL provides a more content-driven experience, given its Time Warner and programming heritage. MSN is more utilitarian in its approach, focused on utilities and references. Consumers would rebel at any effort to combine the two together. It would, however, make sense for the two to share content, services, and best practices, injecting AOL’s programming expertise into MSN and MSN’s technical expertise like anti-spyware and virus protection into AOL. 

There are pressures for Time Warner to spin off AOL, but an outright purchase by MSN seems unlikely to me, especially during a time when online advertising is just hitting its stride again. But if there was to be a purchase of AOL by any of the three portals, MSN would make a great deal more sense than either Yahoo or Google.

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c50bf53ef00d834258b0953ef

Listed below are links to weblogs that reference Rumors of MSN and AOL partnerships:

» Yahoo Launches Instant Search from Digital Media Review
And in the daily press release from hip Web 2.0 companies category today it is Yahoos turn to show that they are still in the game. John Battelles Searchblog talks about the launch of Yahoo Instant Search To... [Read More]

» Microsoft and AOL (and TW?) from Sought After
Lots of rumors lately about MSN and AOL. Although Charlene isn't too bullish on the combination, I think it makes a ton of sense. Some reasons I can think of in no particular order (after traffic that is): 1.) Traffic. [Read More]

» Rumors of MSN and AOL partnerships from Pakpromo :: Brands, Blogs, Social Networks, SEO, RSS
Charlene Li reports about the rumors of MSN buying AOL, sparked by a story in the New York Post ... [Read More]

» New Transplant Method Can Boost Kidney Acceptance from Chemotherapy
and Bone Marrow in Lieu of Taking Powerful, Often Debilitating Anti-Rejection Drugs [Read More]

Comments

jay corriveau

don't you think that the rumours about google buying AOL are more worrying? granted there's a trend at the moment to accuse google of buying EVERYTHING (see last week's rumours about google acquiring reuters). perhaps microsoft is getting more google-like in their acquisitions...

Anders Kargaard Jensen

For Google investors - I really don't think that this will be a threat, as some are suggesting. Especially because AOL only account for 2-3% of Google's operating profit. In fact AOL will hurt the most, as they are receiving around 80% of the search revenue back from Google. MSN will not be able to replace this, even if they give AOL 100% of the search revenue, as they or even Yahoo! are no where near as good as Google at selling search ads. http://investinsearch.blogspot.com/2005/09/forbes-potential-aol-msn-deal-wouldnt.html

Ann

Lots of rumors lately about MSN and AOL. Although Charlene isn't too bullish on the combination, I think it makes a ton of sense. Some reasons I can think of in no particular order (after traffic that is): 1.) Traffic

The comments to this entry are closed.