MS Gets Cold Shoulder from Time Warner

Written by Brett Thomas

December 19, 2005 | 19:20

Tags: #advertising #investment #time-warner

Companies: #aol #google #microsoft

In what is bound to be a more and more frequent occurrance, Microsoft has been pushed away from the bargaining table as media giant Time Warner looks for a friendly face in the internet world. The owners of AOL (and its tremendous consumer base) have been shopping for a company to work with on an over $1 billion direct investment (and many billions in joint advertising) deal.

Talks with MS ended abruptly last week, and Time Warner entered into exclusive negotiations with Google. For their participation, Google is rumoured to be receiving a 5% stake in AOL (~$1 billion).

According! to! Yahoo! News!:

The deal shows that Google is willing to pay to preserve its lucrative relationship with AOL and prevent Microsoft from becoming a bigger provider of Internet search tools. A deal between Microsoft and AOL would have made Microsoft's own advertising network more attractive.

The struggle over AOL reflects the larger competitive landscape between rivals Google and Microsoft, said Internet analyst Scott Kessler of Standard and Poor's.

It appears MS is learning the hard way that money can't buy you love. Google and AOL have already been close bedfellows for some time, but this is the first time that talks of direct investment have been entertained publicly. Perhaps Google's input and assistance will be the breath of fresh air AOL needs to regain its standing in the consumer and financial markets.

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