Time Warner Inc has ended talks with Microsoft Corp and entered exclusive negotiations with Google Inc over a US$1 billion investment and a broader advertising partnership with America Online (AOL), executives close to the talks said.
The announcement on Friday set the stage for a high-profile agreement between two titans of the Internet. Under the deal, expected to be announced as early as next week, Google would get a 5 percent stake in AOL, implying a US$20 billion value for the unit, said one official with direct knowledge of Time Warner's negotiating position.
Google, which operates the Internet's dominant search tools, also agreed to highlight AOL's Web properties as sponsored links and integrate AOL's video clips in its fledgling Google Video service. In exchange, AOL will continue providing Google's search engine to its subscribers.
Officials described the negotiations on condition of anonymity because no agreement has yet been formalized. The deal could be finalized next week, when Time Warner's board meets in New York.
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, Internet analyst Scott Kessler of Standard and Poor's said.
The proposed agreement with Google gives AOL more flexibility to sell Google search ads, and have them appear only on AOL sites. The online service currently directs advertisers to Google and cannot limit search ads to its own sites.
AOL is Google's biggest customer, accounting for about US$420 million, or about 10 percent, of Google's revenue during the first nine months of this year, according to regulatory filings.
Most of the US$420 million came from the ads Google distributes on AOL's Web site. The two companies first began working together in 2002 when Google wrestled away AOL from another online advertising network currently owned by Yahoo Inc.
Microsoft, which increasingly views Google as a fierce rival, has been negotiating with Time Warner since early this year but did not propose any cash investment in AOL, officials said.
Time Warner has been considering options for ramping up AOL's business against a backdrop of criticism from financier Carl Icahn, who is demanding that the company take drastic steps to improve its long-lagging share price, including a massive share buyback.
AOL is shifting its business model from selling dialup Internet access to selling online advertising, which is booming. Google, Microsoft and earlier Yahoo Inc. all expressed interest in some kind of partnership with or stake in AOL to harness its large reach among Internet users.
Microsoft and The Associated Press last month announced plans for an advertising-supported online video news network early next year. Microsoft will supply the technology, video-player and advertising support to the network, while AP's broadcast division will provide the video, which will feature about 50 different stories per day.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts