Media

AOL and Google renew search deal as Bing creeps up

Every time AOL is expected to fade into obscurity, something crazy happens to make it relevant again. Today it’s the five-year extension of AOL’s contract with Google to provide search functions and a portion of ad revenue.

AOL still possesses a 2.3 percent market share of the search market, which isn’t negligible, though it’s dwarfed by Google’s Boeing-sized 66 percent market share, according to ComScore. Yahoo checks in next at 17 percent, with Microsoft’s Bing a seemingly distant 11 percent despite its efforts to unseat the de facto overlord of search.

But this could be a sign that Google feels threatened by Bing and is willing to pay out to secure its dominance in the search engine market. Yahoo and Microsoft recently inked a 10-year partnership deal that would power Yahoo back-end search with Bing.

AOL will receive a portion of the revenue from text-based searches and some of AOL’s video content will be featured on YouTube as part of the agreement.

At AOL’s zenith as a dial-up Internet provider, the company boasted nearly 30 million users according to a BusinessWeek report, but with the advent of broadband its star has begun to wane. According to the company’s most recent 10-Q filing, it had 4.4 million subscribers in June 2010, down from 5.8 million a year earlier. Former Googler Tim Armstrong is currently leading an effort to revive the company as its CEO.

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