War of giants? by Barbora Misakova

If you were a little bit disappointed by the Yahoo vs. Microsoft case and wanted to see more action, maybe a new opportunity is coming straight to you. As I said once, after that not very optimistic end of acquisition, both companies Microsoft and Yahoo were quiet for a while, maybe waiting for new occasion, or just thinking how to get out of this not very pleasant situation. On the other hand, Google wasn't waiting till its rivals get on their feet again and was working as usual. In a very short time this Internet's most profitable company came with its Knol – some kind of Wikipedia thing and it seems that it is not everything what Google was preparing for this year. $1 billion investment for AOL. That's the surprise. And even though Google wants to invest quite a big buck of money, some people think this brave step could lead to a charge against Google's future profits. On the other hand Google believes in this investment and consider it as a good step which could help.

Of course people don't help others just for a good feeling, and Google wants 5% equity stake which would allow the company to participate in AOL's future success. Except Google, there is also Time Warner which still retains management control and full strategic flexibility over AOL. Google will have certain shareholder rights and so can associate with any future sale or public offering of AOL. As Don Logan, Chairman of Time Warner's Media & Communications Group, said they look forward to working with Google, and I am not surprised. Who didn't want to cooperate with the biggest shark in the Internet ocean? And Google bough its stake just to prevent AOL from defecting to Microsoft Corp. Even though the situation looks quite clear now, I would bet it will complicate in a very short time. Maybe we should prepare on a little war between three giants again.

related story: http://news.yahoo.com/s/ap/20080808/ap_on_hi_te/google_aol;_ylt=AjKS3.i5.l.hG0bz_N.AHf2s0NUE

by Barbora Misakova for PocketNews (http://pocketnews.tv)

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posted by Lucia Adamova