Google has generated about 11 percent of its revenue in the first half of this year from its current deal to provide search technology to AOL, but this figure overestimates the importance of the deal to the company.
Analysts said the deal only accounts for 4 percent of revenue after Google returns fees to AOL in its revenue-sharing agreement.
Meanwhile, Microsoft, eyeing Google's lead, is seeking to build its own paid search business, which analysts consider one of the most lucrative sectors in online advertising. It is testing a syndicated search system that competes with Google in France and Singapore and plans a worldwide launch next year.
Microsoft's current proposals with AOL involve a simpler deal that would marshal the advertising forces of both companies in a joint venture, one source said.
Google and Microsoft fighting for AOL
Posted on Wednesday, December 07 2005 @ 14:36 CET by Thomas De Maesschalck