As of yet there is no official announcement of this deal, though the details are being spread around in such a manner that it's all but confirmed at this point. One point of interest is that it seems as thought AOL ads are going to get preferred treatment through Google, possibly trumping other AdWords/AdSense ads. That would be a first for Google's system, which until now has used the power of auctions as the sold criteria for where and how ads appear and could lead to an advertiser and publisher revolt. After all, if paid search results are no longer organic it could lead to lower clicks for the advertiser and lower income for publishers.
The deal is a significant blow to Microsoft, who really could have used AOL as a gateway into other advertising ventures. They've recently been toying around with ad-supported services but seem to be playing catch-up and getting into business with AOL would have been a big move in shoring up their offerings. What likely was the deciding factor for AOL to go with Google was that it would not be dealing with another company whose online presence revolved around a one-stop portal. Google is diversified, yes, but it doesn't try to do the same thing that AOL/MSN/Yahoo does on their homepage.
There's likely to be a whole new round of speculation and analysis if, as expected, an official announcement is made today or tomorrow. Until then it's left to ponder how much this will set Microsoft back and how much this will increase Google's share price. Stay tuned to AdJab for more as this develops.
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