Wednesday, December 21, 2005

AOL/Google deal finally done

The AOL/Google deal has been finally done and the media world will have to live life without the endless speculation surrounding for the last year. We will all instead have to conduct post mortems to ensure we can keep the story alive for as long as possible. After all, it has been a bit of a classic. And could continue to be, particularly for Time Warner.

After all, this is Parsons deal. This is all about Parsons and his board taking control and pointing two fingers at Icahn and his buddies. So, epxect Icahn to come storming back and expect Time Warner to have a royal scrap in 2006. For now Parsons probably has the upper hand. In fact he has just announced a management shake-up which will firm his position by appointing a new COO, Jeff Bewkes.

And the analysts seem positive about the AOL/Google deal which should shut Icahn up a little for a while. And over all it's not a bad deal for both companies. AOL gets to benefit from greater exposure at Google sites and earn more from a broader advertising alliance and Google gets to hang on to their partnership with AOL, get more of AOL's content and get more into banner ads, which is bound to boost their revenues.

A few people will moan about Google losing some of their independence and purity, but it was always going to happen and this move gives Google a help up to becoming the broader portal it was always bound to become. Plus Google now gets a boost in messaging and video, both key areas going forwards.

So, well done Time Warner and well done Google and bad luck to Icahn and to Microsoft. They'll both have to figure out how to fight back in 2006!

No comments: