I waited this long to publish anything about the Google AOL deal because there have been so many twists and turns in the deal that it seemed I would inevitably call it too early as I did a week or so back when I posted about MSFT winning the deal.
Here are my thoughts:
* AOL is smarter than I thought. I think they picked the right partner.
* AOL seemed to win a lot of deal points which surprised me.
* But at the end of the day who would you rather be? Google is the clear winner. MSFT is the obvious loser. Yahoo! probably doesn't do too bad (MSFT is kept at bay). And AOL buys itself time to figure out what its ultimate play on the Internet is.
The above said, the deal does show that Google "needed" this deal or at least felt that way to double down on the AOL deal with lots of bells and whistles. Alan Murray from the WSJ had an interesting take which is starting to resonate with me (although anyone who reads this blog knows I am a die hard Google fan).
I still do love Google and believe they are the kings of the Internet. I haven't sold my stock position in them yet. However, I am starting to worry about their future further ascent more than anything because of their age...not that they are too "young" as a company. It's the opposite. Anything that has been alive for more than 7 yrs on the Internet seems to become vulnerable to something, someone.
Will Google continue to defy logic? Probably. I was recently reminded of their power when I spoke to 3 random companies about their annual marketing spend. One was online education company with $1 million in revenue per year. They spent $60k this year on Google. Another was a tiny online tee time service with $500k in revenue this year. The only marketing the company spent was on Google ($4k in 2005). And lastly, my partner Brad's wife who has a "holistic skin care and healing business" which you can find at www.soakitin.com (sorry for the plug). She spent around $50 on Google.
I turned to Brad and said, "Isn't that insane?? Most every company I know spends a decent amount every year on Google." Even more telling was his response, "And the ones who don't simply don't know they should be yet. And they certainly should be because they will immediately see an ROI."
Well, the revenue is real. The profits are real. The growth seems to be real...But that still doesn't mean it will go on forever. Now if I can only time the stock.
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