Microsoft may not have been able to get the deal done with AOL but what Google gave up to make it happen is turning out be pretty interesting. Here are some details from the New York Times (registration required).
Finally, around 9 p.m., Richard D. Parsons, chief executive of Time Warner told Eric E. Schmidt, chief executive of Google, that he would accept Google's recently sweetened offer. Google, which prides itself on the purity of its search results, agreed to give favored placement to content from AOL throughout its site, something it has never done before.
And according to the Los Angeles Times
"Google pays a $1 billion premium for an insurance policy that insures domination of a very valuable part of the Internet economy," said Jordan Rohan, an analyst with RBC Capital Markets.
negotiators agreed to promote AOL's services across Google.com, a change for the company that made famous the sparse white Web page. Google also hired AOL to sell non-search ads to Google's advertising partners.
Google will continue to take 20% of the revenue generated when people click on the text ads in AOL Search, and AOL will take 20% of the revenue from flashy banners and other display ads it sells on the Google network, according to people familiar with the deal.
So did Google do the right thing, John Batelle wonders if Google may have jumped the shark. AOL feels "Feels like it's a dream come true" according to the Washington Post. It's pretty unclear at this stage of the game exactly where and how much AOL will intrude onto Google's spartan homepage layout, and how much content from AOL will invade organic and paid SERP listings. One thing is for sure Google did just take one big giant step towards portalization.