Google Buys 5% of America Online for US$1 Billion

Posted by: §intå×

Google Buys 5% of America Online for US$1 Billion - 12/21/05 10:44 AM

America Online has sold a 5% stake to Google Inc. for an estimated US$1 billion. This deal binds the two companies closer together and impedes Microsoft's plans to grab a larger share of the lucrative Internet advertising market.

"Our investment underscores our recognition of AOL as a valuable strategic asset and our desire both to contribute to and participate in its future success," said Google CEO Eric Schmidt.

"We're very pleased to build.... on our special relationship with Google in a way that will meaningfully strengthen AOL's position in the fast-growing online advertising business and help drive more advertisers to its Web properties," said AOL.

Source
Posted by: Gremelin

Re: Google Buys 5% of America Online for US$1 Billion - 12/21/05 11:29 AM

This is interesting news... One has to wonder though if it was Google's decision or if it was part of the deal from the Search Engine stuff...
Posted by: §intå×

Re: Google Buys 5% of America Online for US$1 Billion - 12/21/05 11:46 AM

I would venture to say it went something like this.

AOL: You provide our search engine at $x per month of X months. In exchange you buy 5% of our company/stock for 1 billion dollars. This allows us to collect 1 billion dollars for marketing this new "secure AOL" image. and you to make the money back plus some over the life of the contract.

Google: So we buy 5% enough to make money if you do but not have any real say... And you pay us back plus some. Well I guess we are a bank, loan granted.
Posted by: Gremelin

Re: Google Buys 5% of America Online for US$1 Billion - 12/21/05 07:21 PM

Likely ...