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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.