Monday, October 17, 2005

The AOL Deal Frenzy: The Frantic Search for Effective Channels

Well, any more rumors for outfits willing to pony up for a piece of AOL? Mind you, in all likelihood it's just a piece that Time Warner may peel off. With major media companies in a total frenzy to position themselves for online audiences that are growing ever more distant from established content channels it's doubtful that Time Warner has any intention of surrendering its oldest and most developed online channel entirely. The driver for these rumored deals is AOL's quality destination content and personal publishing services such as AOL's instant messaging service that provide destination pages for ads and add-on services. Of all the rumors the Google/Comcast seems to be the most probable one to benefit both parties. Yahoo's unrelenting drive to develop its own content makes it unlikely that Time Warner would want help from its strongest competitor for destination content. Microsoft also has its own destination content that complicates matters.

Google and Comcast come in as more purely technology-oriented media players, providing interested partners that can benefit from feeding destination content that can slow down their competitors while maintaining their focus on other aspects of profitable online media. But with Google's adamant stance on not owning content sources one can assume that such a relationship would keep Google out of the producers' suites and more on the side of providing AOL a broader technology and advertising base with which to compete with Yahoo. Such a deal could make good sense at this point, especially given Google's forthcoming network that would add a wrinkle to the AOL relationship oddly reminiscent of AOL's own attempts at using a private network to manage access to public content. It all comes down to effective channels for content, with Google vying to become the new ether through which most content is found and accessed - with or without a destination portal. If you're AOL that's not a bad channel to have on your side.
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