REFRESH(1800 sec): http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_4345644,00.html header_business.gif ****JavaScript based drop down DHTML menu generated by NavStudio. (OpenCube Inc. - http://www.opencube.com)**** Advertisement [spacer.gif] [spacer.gif] Home >Business > Tech & telecom AOL, Google will be on their own to make marriage work STORY TOOLS Email this story | Print MORE STORIES By Ben Gomes-Casseres, The Providence Journal December 28, 2005 Details of the wedding are still being worked out, but Google and AOL have announced their engagement. To mark the occasion, Google spent way more than the customary two months of income on the diamond ring it gave AOL. (Then again, Google has more savings in the bank than most young bachelors.) Friends and family want to know: Is it for real this time? Given the record of entertainment-world engagements (remember JLo and Ben?), this question is justified. Shareholders and customers also want to know: What does Google get for this investment? Given the record of entertainment-world mergers and joint ventures (remember AOL- Time Warner? And Pixar-Disney?), this question, too, is justified. Google's billion-dollar engagement ring will not buy love, but it will buy bragging rights, blocking rights and building rights. The first two will get all the buzz in the next few days, but the last is what will make this marriage succeed or fail. Google and AOL now can claim the top spot in the Internet-visitor sweepstakes. Google's 91 million unique monthly visitors and AOL's 107 million surpass MSN's (101 million), as well as market-leader Yahoo!'s (125 million). Details are not out yet, but one would expect that Google's investment buys it the right to veto future deals between AOL and Microsoft. This is less certain than it looks. Google's $1 billion is said to represent a 5 percent stake in AOL. But last time I checked, there is no AOL stock. So this "virtual" stake in AOL is really more like a 1 percent stake in Time Warner (depending on how you value AOL). In most major corporations, that would not buy you veto rights on anything. And, unlike in human marriages, there is no law against corporate polygamy. Frankly, AOL's own reputation does not help on this matter of exclusivity. During the so-called browser wars, a decade ago, AOL first signed a deal with Netscape, then within weeks concluded a more substantial deal with Microsoft. Never mind that it was later burned by Microsoft's own lack of marital fidelity (see Justice Department records). Internet companies are Web "properties," we are told. Google and AOL are set to combine their properties and are promising shareholders that they will build a bigger and better fun house on it. That would indeed be good for all of us. Essentially, the house Google and AOL plan to build would have more space for billboards than their bachelor apartments had. That is not pretty, but it can be profitable. AOL reportedly is promising to sell advertisements for Google, and Google is promising to showcase more of AOL's wares on its sites. Let's ignore for a moment that most of us would like to see less, not more, advertising on the Web. The question remains: Do these companies need a major exclusive alliance to conclude a mutually beneficial cross-marketing deal? AOL also is reportedly agreeing to renew its five-year contract to use Google's utilities (its search engine). The hope is that AOL and Google can create for us a more useful, a more friendly and, yes, a more entertaining Internet. They certainly have the talent to do so, and the good will of those thousands of visitors. The test will be if they can truly make the marriage work. For it to succeed, the initial investment of cash is not enough; it is just a down payment - a promise to try to work things out together, so to speak. There will be rocky times, such as if the partners try to create a joint sales force or, harder still, if they try to manage mutual sales with separate sales forces. Microsoft is not sitting still. It already has announced a marriage with Yahoo in instant messaging. As a result, in the IM battle, which is much more interesting than the ad-men battle, we now have two clear camps: Microsoft-Yahoo vs. AOL-Google. The latter have not yet said what implications, if any, their current deal has for this battle. The markets will reveal soon enough whether friends and family are willing to give the AOL-Google marriage their blessing. But from then on, they are on their own to make it work. 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