AOL Search Engine to Drop Google For Microsoft

Time Warner and Microsoft are expected to co-develop an advertising
network that will level its services to compete with the largest search
engine giants Yahoo! Inc and Google.

The extravagant plan of
Microsoft to spend billions on AOL stake while combining its dial-up
business has been scaled back a bit. According to the Wall Street
Journal report, the changes in the negotiations will have a massive
impact as the deal is expected to be formally closed probably before
Christmas.

Based on The Journal’s report, the past negotiations have been changed
due to a plan of building an online advertising service alongside its
rival such as Yahoo’s newly launched Publisher Network and Google’s
AdSense.

However, AOL’s deal with Microsoft will seriously impact Google since AOL is its existing search and advertising provider.

According to people familiar with the current deal, under its
negotiations with Microsoft, AOL will eventually drop Google as its
primary provider of Internet search and use Microsoft’s MSN service
instead.

At this time, AOL still relies on Google’s search engine. Google
provides AOL with a cut of the total advertising revenue generated by
AOL customers. Based from last year’s report, Google turned over a
total of US$300 million in revenue to AOL. Their contract will run into
the end of 2006.

Sources told the Journal that a joint advertising sales force would
post and sell ads would appear both on MSN and AOL sites. However,
whether the ad service will be derived from Microsoft’s AdCenter
project, which is designed to be a self-service advertising platform,
remain unknown.

By Paulene Calinawan

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