4 ms·
Everyone is claiming that Google lost $700 million in this deal, which is true, but I think it's more important to notice that by selling now they are avoiding
by michaelfairley 17y ago
Everyone is claiming that Google lost $700 million in this deal, which is true, but I think it's more important to notice that by selling now they are avoiding future losses. It always sucks to sell a stock after you've lost money on it, but it sucks even more to ride it down further if there's very little hope of it recovering.
- mikedouglas 17y agoIt's also important to consider the counterfactual where it was Microsoft who had landed that search/ad deal. If I remember the discussion correctly, many considered this a defensive move on Google's part. I can't imagine that Google had a high opinion of AOL's prospects, so I assume they thought blocking MS was worth the loss.
- seldo 17y agoWell, let's see if was -- they did this in December 2005, meaning the $750m works out to about $17m per month of the deal. Does Google make more than $17m per month from its partnership with AOL? Almost certainly, but it probably hurt a lot. They were expecting to be able to spread the cost over a lot longer, I'm pretty sure.