Google's tainting itself with this AOL alliance. I don't like the sound of that stuff on advertising.

http://money.cnn.com/2005/12/20/technol ... tm?cnn=yes

Google acquires stake in AOL
Internet search giant to pay $1 billion for 5 percent stake in AOL; Microsoft shut out of deal.
December 20, 2005: 6:59 PM EST

NEW YORK (Reuters) - Google Inc. and America Online Inc. Tuesday expanded their search and advertising alliance to include video and instant messaging, shutting out Microsoft Corp., which had fought hard for a deal with Time Warner Inc.'s AOL unit.

America Online said Google had agreed to invest $1 billion to take a 5 percent stake in AOL, as part of an enhanced pact where Google will move beyond text-based advertising to allow AOL to sell graphical ads to Google's fast-growing ad network.

The stake effectively values AOL at $20 billion, a key benchmark should Time Warner elect to spinoff or sell a part of its Internet unit in response to dissident shareholder Carl Icahn's proxy campaign to break up the company.

Terms of the deal call for AOL to make more of its Web sites searchable via Google search, including a plans to feature AOL's premium video services within Google Video, a way of searching for Web-based video programming.

They also said they had agreed, under certain unspecified conditions, to allow users of Google's recently introduced instant messaging system Google Talk to communicate with users of AOL's market-leading AIM instant messaging service.

Ahead of the announcement, analysts called the new agreement a major defensive win for Web search leader Google, depriving Microsoft (Research) of a major customer that would have jump-started its push to compete with Google in the online ad services market.

In a letter to Time Warner's board of directors released Monday, billionaire investor Icahn labeled the potential AOL-Google deal as "disastrous" because it may rule out potential future deals AOL might do with Google rivals such as eBay Inc. (Research) or Microsoft.

Shares of Google (Research) edged lower in after-hours trade on the Nasdaq Tuesday after closing at $429.74. Time Warner (Research) shares edged higher after the bell after closing over 1 percent higher at $17.74 on the New York Stock Exchange.

Time Warner is the parent company of CNNMoney.com

I don't think this is a big deal, I think it's inevitable.

TV and Radio are broadcast "free" because of advertisements. You get to use Google "free", so here come the ads.

before long, the whole world is gonna be owned by AOL

AOL is a dying companying, this deal gives them some life. The traffic directed to AOL from Google should help them out. It still doesn't solve their main problem of declining subscribers. They need to link up with a broadband provider.

Pssst, Google's stock is going to 800.

I don't think Google's stock will get higher than $500. I think it's a ticking timebomb waiting to go off. This deal is proof of the irrational stock price. Why would a purely defensive deal, which the AOL deal was, make the stock price go up? I also think they are losing focus of what they are, a search company. Their revenue growth will slow after this coming year. Also, when they start putting ads on the front page of google.com (which they have started to talk about), people will realize that despite what Google says, they really are a portal and that is going to turn off a lot of people. They suddenly won't be that "cool" company they were and will be what they really are a big business trying to make a buck. The thing that scares me the most is this 10x valuation analysts have started using. You have to divide their stock price by 10 to compare it more closely with Yahoo and other portals. It reminds me of tech bust when all these analysts were coming up with crazy rationales and metrics to value what really were worthless companies. Not to say the Google is worthless, because they are not.

The trend is your friend until it ends.



Also, two words...India & China.

Bill Gates just came back from India. The new world is in India and China. Check out India's main internet porthole REDF. Its a crazy up/down stock, but its going much higher. Also, Japan's porthole, IIJI, just went through an IPO. I made a few bucks and got out quickly. I'll probably get back in once this thing bottom's out.

You are definitely right about the trend. It's better to own crappy companies that people love, than great companies nobody cares about. Google reminds of Qualcomm before it went bust. I remember going to work everyday and everyone talking about Qualcomm and how much cash they were making. I made a mint in cell tower stocks the last two years.

Does this mean more pop ups on google

I don't think so. The main benefit Google is getting is that they will not lose AOL's revenue to Microsoft. AOL is reaping more benefits that Google. Google may start putting ads on their front page though.