Google and AOL make a deal

I was listening to Bloomberg radio on Sirius on Friday and they had an expert on that said that it must be a bad day at Microsoft because Google made a deal with AOL (TDavid is wondering which way this all will be spun). Now, I don’t know about the executive offices, but in building 18 we were a little disappointed, but no one was sitting in their offices crying or anything like that (which is how the panel made us sound). It’s always interesting how the press plays up business conflict.

Oh, and to TDavid’s questioning: why must everything be spun? Sometimes in business you lose. Sometimes you win. The trick is to increase your average. When I sold cameras I didn’t close every sale but I tried to close every one.

Sometimes, though, when it looks like you’ve lost things come back around. Remember, Bill Gates didn’t want the operating system business. He sent IBM away. We all know what happened next.

We’ve had more than our fair share of wins.

For instance, Lorin Olsen, CTO of Sprint recently announced he’s joining Microsoft. That’s a huge win. I met Lorin last year and he’s whip smart and a real interesting guy. Can’t wait to see what he’s working on. He was at Sprint for 19 years.

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12 thoughts on “Google and AOL make a deal

  1. AOL was a win:win deal which ever way the deal went.

    If MSN had won the deal then they would have removed 12% of Googles revenue (Goolge are a one revenue pony) and that would have hurt them badly. MSN’s reach would have increased slightly and a few of AOL’s content properties would have been nice.

    But as MSN lost then all it means is Google has paid $1bn dollars to keep its same partner and the same revenue stream. An expensive excercise just to keep the status quo!

    AOL are the only winners. They are losing market share to the GYM club and Time Warner was not going to bail them out. So selling themselves to the highest bidder to get some money is still a short term fix.

    Only time will tell but I think AOL will become an Albatross around Google’s neck. So either way I think MSN wins even if the better win was stuff Google with a major lose to their revenue stream. As in all wars this battle was lost by MSN but the cost of victory has seriously weakened Google’s ability in the next battle. Remember Microsoft is not a one revenue pony and still has some $50bn to invest when the time is right.

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  2. AOL was a win:win deal which ever way the deal went.

    If MSN had won the deal then they would have removed 12% of Googles revenue (Goolge are a one revenue pony) and that would have hurt them badly. MSN’s reach would have increased slightly and a few of AOL’s content properties would have been nice.

    But as MSN lost then all it means is Google has paid $1bn dollars to keep its same partner and the same revenue stream. An expensive excercise just to keep the status quo!

    AOL are the only winners. They are losing market share to the GYM club and Time Warner was not going to bail them out. So selling themselves to the highest bidder to get some money is still a short term fix.

    Only time will tell but I think AOL will become an Albatross around Google’s neck. So either way I think MSN wins even if the better win was stuff Google with a major lose to their revenue stream. As in all wars this battle was lost by MSN but the cost of victory has seriously weakened Google’s ability in the next battle. Remember Microsoft is not a one revenue pony and still has some $50bn to invest when the time is right.

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  3. mono: that story is legend. IBM went down to DRI Research (Gates sent them there cause they had the CPM operating system). Gary Kildall was the guy who ran that. They messed up for a variety of reasons and IBM came back and said something like “we can’t deal with those DRI folks, can you find us something else?”

    An employee of Gates knew about a local Seattle guy who had a clone of CPM. They bought that from him for about $65,000. Turned it into DOS. And went on to build what you know of Microsoft today.

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  4. mono: that story is legend. IBM went down to DRI Research (Gates sent them there cause they had the CPM operating system). Gary Kildall was the guy who ran that. They messed up for a variety of reasons and IBM came back and said something like “we can’t deal with those DRI folks, can you find us something else?”

    An employee of Gates knew about a local Seattle guy who had a clone of CPM. They bought that from him for about $65,000. Turned it into DOS. And went on to build what you know of Microsoft today.

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  5. Robert,

    Thanks for the kind (and sufficiently exaggerated) words. Who do I write the honorarium check to? 😉

    BTW, my first assignment for Microsoft is going to be in KC as an ATS. I am thrilled to get into sales support. For the last twenty-five years, I’ve done just about everything on every conceivable computing platform – except sales. So this will be one of the biggest challenges to date! And once I master the sales thing, who knows what comes next?

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  6. Robert,

    Thanks for the kind (and sufficiently exaggerated) words. Who do I write the honorarium check to? 😉

    BTW, my first assignment for Microsoft is going to be in KC as an ATS. I am thrilled to get into sales support. For the last twenty-five years, I’ve done just about everything on every conceivable computing platform – except sales. So this will be one of the biggest challenges to date! And once I master the sales thing, who knows what comes next?

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  7. One further clarification is needed. I was not the CTO at Sprint, though I worked through the IT CTO office. For the past few years, I have been a humble senior manager / senior architect. The new CTO of Sprint Nextel is Barry West. Again, thanks for the promotion. But I want to make sure Microsoft’s Geek Blogger gets the record straight!

    -Lorin-

    BTW, there is a larger and more interesting thread from this deal. With Microsoft and Yahoo agreeing to IM interoperability, and Google and AOL cozying up (in general), I wonder if Yahoo will draw closer to Microsoft or try to go it alone. Right now, they seem to be awfully stranded. I am sure that there are some things brewing behind the scenes, but I do love to speculate…

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  8. One further clarification is needed. I was not the CTO at Sprint, though I worked through the IT CTO office. For the past few years, I have been a humble senior manager / senior architect. The new CTO of Sprint Nextel is Barry West. Again, thanks for the promotion. But I want to make sure Microsoft’s Geek Blogger gets the record straight!

    -Lorin-

    BTW, there is a larger and more interesting thread from this deal. With Microsoft and Yahoo agreeing to IM interoperability, and Google and AOL cozying up (in general), I wonder if Yahoo will draw closer to Microsoft or try to go it alone. Right now, they seem to be awfully stranded. I am sure that there are some things brewing behind the scenes, but I do love to speculate…

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