Google to Get 'First Dibs' in New AOL Search Deal

AOL is in full transition now, trying to shed its past and turn things around with a focus on content and, to a lesser degree for now, its ad network. It may be a while before the positive signs start to show though, warns AOL CEO Tim Armstrong. In a Q&A at the Citi Global Entertainment, Media & Telecommunications Conference in San Francisco, he also made some interesting comments about AOL's homepage search provider as the current deal with Google is up for renewal at the end of this year.

Armstrong served at Google since the company's early beginnings and left his position as US Sales Chief to take over the struggling AOL in early 2009. However, he says that his previous allegiance won't prevent him from seeking the best search deal for AOL, one that has the greatest beneficial rewards but also will endure for the next five even 10 years.

While he didn't say he had any reason to move away from Google, he will be weighing in all options including any possible offers from Microsoft, especially if a deal would have added benefits for AOL. "Google's been a great partner. They're obviously going to get first dibs. Microsoft and other people are very interesting partners as well," he said.

“Future search deals will have to good for AOL overall, not just as a way to drive quick cash,” he said. “And cash is very important. Could we get the same economics we got before. We have a lot of people on our side who know how to do a search deal. So I think we can get good terms."

He also showed how AOL was changing its approach to advertising, putting more weight on quality rather than quantity. On the homepage, for example, the number of ads has been reduced from 17 to just one. This new way of doing things may also affect any future search deals. "There are some things we might trade off in next search deal, like reducing the number of search ads from outside parties and putting more content on our sites that we can sell display against,” he added.