AOL renews ad deal with Google

Posted by Emma Woollacott

AOL's renewed its search advertising deal with Google for another five years, and expanded it to include mobile search and YouTube.

The new agreement is based purely on a revenue-sharing deal, with no up-front payments; the specifics weren't disclosed. Ad revenue from Google amounts to as much as a third of AOL's total ad earnings, pulling in $209 million in the six months to June.

Despite the fact that they've been working together for ten years, it was by no means a done deal, with AOL saying that it had explored a number of alternatives.

"Today is another important step in the turnaround of AOL," said Tim Armstrong, AOL's chairman and CEO. "AOL users will be getting a better search and search ads experience from the best search company in the world – Google. After nearly a decade-long partnership in search, we're looking forward to expanding our global relationship to mobile search and YouTube. All aspects of our partnership will be improved by this deal."

The companies say that Google will enhance its web search products to improve search experience across AOL's network of sites. YouTube will host video content from AOL.

"We're excited to deepen our partnership. This agreement combines Google's expertise in search and advertising with AOL's strength in online content," said Eric Schmidt, chairman and CEO of Google.

"It's particularly exciting to see our relationship expand into video and mobile. These areas are now at the heart of users' online experiences and at the core of both of our businesses."

Since Armstrong joined AOL, spun off from Time Warner late last year, he's been working on reinvigorating the company. He's got shot of social networking site Bebo, rebuilt the ad platform, and announced an intention to focus more on mobile.