As Microsoft considers taking a stake in America Online, the world's biggest internet service provider, AOL may end up replacing Google's search engine with Microsoft's, reports Bloomberg, citing an unnamed source familiar with the agreement that the two companies are discussing. AOL and Microsoft have also talked about making their instant messaging services compatible and jointly selling online advertising, the person said.
"Microsoft's problem is that despite having all this stuff, they haven't really budged their share of search," Danny Sullivan, editor of SearchEngineWatch.com, is quoted by Bloomberg as saying.
A deal would allow Microsoft, the world's biggest software company, to strengthen its position in the search market and revitalize its MSN internet business. Google's share of global search queries in June was 56 percent; Yahoo's, 22 percent; and MSN's 11 percent.
AOL has lost 6 million dial-up subscribers since 2002, and this year launched a free portal focusing on videos, news - and a search engine powered by Google - to bolster ad revenue. Google has provided the search technology for AOL as well as text ads in search results.
Online advertising and other fees generated by AOL accounted for some 11 percent of Google's revenue in the six months ended June 30, Google said in a September 8 regulatory filing.