"Users of Google's search engine will soon see something they are not used to on the notoriously spare site: advertising with logos and graphics. And the advertisers will not be limited to America Online, whose talks with Google prompted the change in policy, according to two executives close to the companies' negotiations." The Financial Times has more on the partnership"
http://www.nytimes.com/2005/12/20/technology/20google.html
Users of Google's search engine will soon see something they are not used to on the notoriously spare site: advertising with logos and graphics. And the advertisers will not be limited to America Online, whose talks with Google prompted the change in policy, according to two executives close to the companies' negotiations.
As part of their deal, which is expected to be announced this afternoon, Google is providing AOL with $300 million in advertising on Google's Web sites, intended to use to draw Google search users to related content on AOL's sites, the executives said. That sum is on top of the $1 billion in cash that Google is to invest to buy a 5 percent stake in AOL.
Representatives of Google and AOL said their companies would not comment on any aspect of the negotiations. Google, which has been providing search technology and placing search-based advertising on AOL since 2002, emerged Friday with a tentative deal to renew and expand that relationship, fending off a challenge from Microsoft.
The executives close to the talks said that at AOL's request, Google would begin to test various forms of graphical ads, and that it would make the same formats available to other advertisers. Google has started to sell graphical ads for placement on other sites; plans to do so on Google itself were accelerated by the AOL talks, an executive involved in the negotiations said.
Graphical advertisements, like the common rectangular ads known as banners, have been a feature of most commercial Internet sites for a decade. Google made a name for itself, in part, because it went without graphical ads in favor of small text advertisements linked to the topics for which users search. Google's simple pages, quick to load and easy to read, helped the site build a following, and text advertisements proved valuable to marketers looking for people interested in their products.
Yet as AOL's parent, Time Warner, was exploring potential deals with Google and Microsoft, it pressed Google for ways that Google users could be directed to AOL pages. AOL is trying to replace the declining profit from its dial-up subscription business with advertising revenue from free Web sites like AOL.com.
The $300 million in advertising being provided to AOL can be spent on traditional text ads or on these new experimental formats, the executives close to the talks said; AOL will have to bid on the advertisements in Google's auction and will be charged out of the $300 million allotment.
One format being discussed is a box, which may include a photograph and a logo, that would appear on the main search results pages toward the bottom of the advertisements in the right-hand column. Traditional banner ads may appear on Google Image Search and the Froogle shopping site, which already include many photographs, an executive involved said. No advertising is contemplated for the Google home page.
In addition to the $300 million in advertising, Google has agreed to help put content from AOL on other parts of its site as well. Google, for example, will look for content and services from AOL to include in a feature it calls One Box, which puts very specific links and content above regular results for certain search topics, an executive involved in the negotiations said.
Google does not charge sites to be included in its One Box program. Google did not promise any exclusivity to AOL's content, but it did agree to consider it in any future One Box expansion, the executive said. One likely prospect would be for a new One Box feature on celebrities that Google is developing, the executive said.
Google also agreed to provide technical assistance to AOL to help explain how to make its pages easier for Google - and other search engines - to find and include in its index of the Web. Google has provided similar information for other large Web sites, according to Kevin Lee, executive chairman of Did-it, a search marketing firm. In general, Google will offer an engineer who recites publicly available technical information on how Google's search engine evaluates Web sites.
Lynn Fox, a Google spokeswoman, said that no deals Google was contemplating would allow its search results to favor a particular company.
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http://news.ft.com/cms/s/88c8eacc-70d2-11da-89d3-0000779e2340.html
Google deal to include AOL ads partnership
By Aline van Duyn in New York and Richard Waters in San Francisco
Published: December 19 2005 22:45 | Last updated: December 19 2005 22:49
Google is expected to announce a deal with AOL on Tuesday which will include an advertising partnership, the promotion of AOL content on Google and the joint development of video search, marking a shift in the search giant?s strategy.
The deal is expected to be approved on Tuesday by the board of Time Warner, AOL?s parent company.
Google, which has shied away from in-depth partnerships with its competitors, particularly on the content side, has seen its shares double this year on the back of strong growth in search advertising. Google is expected to pay $1bn for a 5 per cent stake in AOL.
The likely AOL deal was revealed at the end of last week when Google entered exclusive talks, trumping rival Microsoft, which had hoped for a deal with AOL to boost its MSN internet division. The final details were ironed out over the weekend.
?We had anticipated that Google would be reticent to give the same operational support (such as drive traffice to AOL.com) as MSN,? said Jessica Reif Cohen, analyst at Merrill Lynch. ?It appears the strategic importance of the relationship, and the desire to stymie MSN, led Google to make significant concessions to AOL.?
Specifically, Google will allow AOL to run auctions for search-related advertising. Under their existing search deal, the ads are sold by Google. AOL will also sell display ads on Google sites. The deal is likely to include a credit that AOL can use for search ads promoting its content, including some with graphic displays. The joint development of video search is also planned, and Google will have access to AOL?s video library.
Any sign that Google will give preferential treatment to AOL?s content could damage the credibility of its search engine, analysts warned. ?They?ve worked very, very hard to persuade the market that they?re not playing favourites in terms of content,? said Michael Gartenberg, an analyst at Jupiter Research. ?That?s an arrangement they want to preserve.?
The deal with AOL also opens up Google?s closed advertising system for the first time, potentially weakening its claim to being able to deliver the most revelant advertisements available anywhere on the web.
The deal comes as Time Warner faces a fight for board control from Carl Icahn, the activist shareholder who owns 3 per cent of its shares. If the board can strike a deal which pushes the company?s price higher, it will be harder for Mr Icahn to gain support.
On Monday, Mr Icahn sent a letter to the board, urging them not to approve a deal with AOL that might ?make it more difficult or in any way preclude a merger or other type of transaction with companies such IAC, eBay, Yahoo or Microsoft?.
http://www.nytimes.com/2005/12/20/technology/20google.html
Users of Google's search engine will soon see something they are not used to on the notoriously spare site: advertising with logos and graphics. And the advertisers will not be limited to America Online, whose talks with Google prompted the change in policy, according to two executives close to the companies' negotiations.
As part of their deal, which is expected to be announced this afternoon, Google is providing AOL with $300 million in advertising on Google's Web sites, intended to use to draw Google search users to related content on AOL's sites, the executives said. That sum is on top of the $1 billion in cash that Google is to invest to buy a 5 percent stake in AOL.
Representatives of Google and AOL said their companies would not comment on any aspect of the negotiations. Google, which has been providing search technology and placing search-based advertising on AOL since 2002, emerged Friday with a tentative deal to renew and expand that relationship, fending off a challenge from Microsoft.
The executives close to the talks said that at AOL's request, Google would begin to test various forms of graphical ads, and that it would make the same formats available to other advertisers. Google has started to sell graphical ads for placement on other sites; plans to do so on Google itself were accelerated by the AOL talks, an executive involved in the negotiations said.
Graphical advertisements, like the common rectangular ads known as banners, have been a feature of most commercial Internet sites for a decade. Google made a name for itself, in part, because it went without graphical ads in favor of small text advertisements linked to the topics for which users search. Google's simple pages, quick to load and easy to read, helped the site build a following, and text advertisements proved valuable to marketers looking for people interested in their products.
Yet as AOL's parent, Time Warner, was exploring potential deals with Google and Microsoft, it pressed Google for ways that Google users could be directed to AOL pages. AOL is trying to replace the declining profit from its dial-up subscription business with advertising revenue from free Web sites like AOL.com.
The $300 million in advertising being provided to AOL can be spent on traditional text ads or on these new experimental formats, the executives close to the talks said; AOL will have to bid on the advertisements in Google's auction and will be charged out of the $300 million allotment.
One format being discussed is a box, which may include a photograph and a logo, that would appear on the main search results pages toward the bottom of the advertisements in the right-hand column. Traditional banner ads may appear on Google Image Search and the Froogle shopping site, which already include many photographs, an executive involved said. No advertising is contemplated for the Google home page.
In addition to the $300 million in advertising, Google has agreed to help put content from AOL on other parts of its site as well. Google, for example, will look for content and services from AOL to include in a feature it calls One Box, which puts very specific links and content above regular results for certain search topics, an executive involved in the negotiations said.
Google does not charge sites to be included in its One Box program. Google did not promise any exclusivity to AOL's content, but it did agree to consider it in any future One Box expansion, the executive said. One likely prospect would be for a new One Box feature on celebrities that Google is developing, the executive said.
Google also agreed to provide technical assistance to AOL to help explain how to make its pages easier for Google - and other search engines - to find and include in its index of the Web. Google has provided similar information for other large Web sites, according to Kevin Lee, executive chairman of Did-it, a search marketing firm. In general, Google will offer an engineer who recites publicly available technical information on how Google's search engine evaluates Web sites.
Lynn Fox, a Google spokeswoman, said that no deals Google was contemplating would allow its search results to favor a particular company.
---------------------
http://news.ft.com/cms/s/88c8eacc-70d2-11da-89d3-0000779e2340.html
Google deal to include AOL ads partnership
By Aline van Duyn in New York and Richard Waters in San Francisco
Published: December 19 2005 22:45 | Last updated: December 19 2005 22:49
Google is expected to announce a deal with AOL on Tuesday which will include an advertising partnership, the promotion of AOL content on Google and the joint development of video search, marking a shift in the search giant?s strategy.
The deal is expected to be approved on Tuesday by the board of Time Warner, AOL?s parent company.
Google, which has shied away from in-depth partnerships with its competitors, particularly on the content side, has seen its shares double this year on the back of strong growth in search advertising. Google is expected to pay $1bn for a 5 per cent stake in AOL.
The likely AOL deal was revealed at the end of last week when Google entered exclusive talks, trumping rival Microsoft, which had hoped for a deal with AOL to boost its MSN internet division. The final details were ironed out over the weekend.
?We had anticipated that Google would be reticent to give the same operational support (such as drive traffice to AOL.com) as MSN,? said Jessica Reif Cohen, analyst at Merrill Lynch. ?It appears the strategic importance of the relationship, and the desire to stymie MSN, led Google to make significant concessions to AOL.?
Specifically, Google will allow AOL to run auctions for search-related advertising. Under their existing search deal, the ads are sold by Google. AOL will also sell display ads on Google sites. The deal is likely to include a credit that AOL can use for search ads promoting its content, including some with graphic displays. The joint development of video search is also planned, and Google will have access to AOL?s video library.
Any sign that Google will give preferential treatment to AOL?s content could damage the credibility of its search engine, analysts warned. ?They?ve worked very, very hard to persuade the market that they?re not playing favourites in terms of content,? said Michael Gartenberg, an analyst at Jupiter Research. ?That?s an arrangement they want to preserve.?
The deal with AOL also opens up Google?s closed advertising system for the first time, potentially weakening its claim to being able to deliver the most revelant advertisements available anywhere on the web.
The deal comes as Time Warner faces a fight for board control from Carl Icahn, the activist shareholder who owns 3 per cent of its shares. If the board can strike a deal which pushes the company?s price higher, it will be harder for Mr Icahn to gain support.
On Monday, Mr Icahn sent a letter to the board, urging them not to approve a deal with AOL that might ?make it more difficult or in any way preclude a merger or other type of transaction with companies such IAC, eBay, Yahoo or Microsoft?.
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