America Online Buys Developer of Video Search Service
Furthering its efforts to focus on Internet video, America Online said yesterday that it had acquired Truveo, a private Silicon Valley company that runs a search engine for video clips. AOL did not disclose the value of the purchase …
Context & Ripple Effects
The Truveo purchase actually closed in December; AOL is announcing it now as the centerpiece of an explicitly stated push into Internet video, with financial terms left undisclosed. Coverage on January 10 had already cast it as the opening move in a broader consolidation of the search market by large Internet companies — Software Only literally titled it Search Consolidation Act #1, with Reuters filing the same deal news a day earlier.
The timing matters because AOL's alliance map is being redrawn at the same moment: the corpus records a confirmed end to AOL's close partnership with Google, and Motley Fool's syndicated take runs under the headline 'AOL Betrays Google.' That sits alongside unconfirmed December reports of an exclusive Google search-advertising deal that Carl Icahn opposed, and rumored talks that would have put AOL advertisers' graphic ads on Google search results.
First-order effects
- Truveo's video-crawl technology moves inside AOL, giving the portal an owned video-search engine rather than a licensed one, while its Silicon Valley team becomes part of AOL's video unit.
Second-order effects
- Yahoo and other portal-scale rivals face pressure to match AOL's buy-versus-build move in video search, since analysts were already framing large-player acquisitions like this one as a consolidation wave in search.
- With the Google partnership confirmed ended, AOL loses its richest traffic-monetization channel and must make owned assets like Truveo carry more of the load — raising the stakes on whatever search-advertising arrangement it negotiates next.
Third-order effects
- If the pattern holds, search stops being a market of independent engines and becomes a capability absorbed into a handful of portals — with video, still nascent as a searchable format, treated as the next battleground worth pre-positioning for.
The trend: Large Internet portals are consolidating search capability through acquisition, with video emerging as the format they are buying ahead of demand.