AOL, Google, The Way We Were

    December 23, 2005
    WebProNews Staff

It has all the trappings of a Harlequin romance: rich older guy woos a girl who hasn’t drawn much attention, girl becomes more attractive and attracts more suitors, a new young richer guy vies for her affections, girl calls older guy and tells him he can have the ring back because, well, she’s found true love.

AOL, Google, The Way We Were
AOL, Google, The Way We Were

About this time last year, maybe earlier, the bright people in Redmond began calling a number in Dulles. “This is Microsoft,” one can imagine the voice saying at the Redmond end of the line to AOL. “We’d like to offer you a proposal.”

Talks stayed under wraps, but as winter turned to spring, yielded to summer, and fell into fall, word began to leak to the press. “Sources say,” “people close to the talks,” the usual sort of anonymous running commentary these stories see: Microsoft was going to pay $5 billion for a piece of AOL.

Like the corners of my mind
Misty water-colored memories
Of the way we were

Time Warner CEO Richard Parsons criticized those rampant chatterings during a trip to Hong Kong. “It’s market rumors, and I can’t curb market rumors,” Parsons said

In short order, Google and Yahoo joined Microsoft in the competition. The $5 billion figure was still being discussed as the starting price point for half of AOL.

Scattered pictures,
Of the smiles we left behind
Smiles we gave to one another
For the way we were

Yahoo’s participation in the overtures for a piece of AOL came to an abrupt halt in early November. CEO Terry Semel had met with Parsons in New York around Halloween to discuss the possibility of a deal.

“After we learned what their proposed deal terms were we passed and we’ve never looked back,” a Yahoo spokesperson said. A proposed 20 for 80 stock swap didn’t appeal to Time Warner, which reportedly did not want to find itself holding a minority stake in AOL. Rumored interest from News Corp magnate Rupert Murdoch never rose beyond a whisper.

Can it be that it was all so simple then?
Or has time re-written every line?
If we had the chance to do it all again
Tell me, would we? could we?

Though we didn’t realize it at the time, we may have seen an early indicator of Google’s interest in AOL. Noted technology pundit Robert X. Cringely wrote a column in mid-November that discussed portable data centers that could be trucked anywhere in the country, and airlifted as well.

Once those are in place, the concept of network latency would become a fading memory, as a high-bandwidth GoogleNet could easily deliver all kinds of content, from text through multimedia, at tremendous speeds. Back to this in a moment.

May be beautiful and yet
What’s too painful to remember
We simply choose to forget

However, it looked like Microsoft’s year-long stop and go efforts would payoff when reports began to emerge that deal would be announced before Christmas

But wait!!! A few hours later the story changed, leaving the door open for Google to charge past Microsoft and win the day. Ten long days passed. Then it happened. Parsons gave Microsoft CEO Steve Ballmer the awful news: Google was in, and Microsoft was out.

Now, Microsoft has to move forward without the AOL network as a new playground for its search and forthcoming advertising solution, AdCenter. Advertising looks like it may be the key.

Those portable data centers mentioned earlier, coupled with AOL’s demand that they have the opportunity to place graphical advertising on the Google search results pages, could be related. Google has already acknowledged they planned to do graphical ads on pages of results anyway, and that the AOL pact just nudged the timetable forward.

That’s the way the year was for Microsoft, Google, and AOL.

So it’s the laughter
We will remember
Whenever we remember…
The way we were…
The way we were…

David Utter is a staff writer for WebProNews covering technology and business.