• by Wendy Davis , Staff Writer @wendyndavis, October 13, 2005

Google and Comcast seem to mean business about buying an interest in America Online. Today's Wall Street Journal reports that the search giant and cable provider reportedly are talking with Time Warner about paying $5 billion for a minority stake in AOL.

The Journal reported that current negotiations were sparked by a September article in the New York Post stating that MSN was in talks to buy AOL. Apparently, this news propelled Google to start negotiating in earnest with Time Warner. According to the Journal, AOL's CEO Jon Miller and Google executives met last week at the Web 2.0 Conference in San Francisco; also last week, Google CEO Eric Schmidt reportedly came to New York to take meetings with Time Warner execs.

For Google, a tie-up with AOL would immediately give the search engine access to a trove of broadband video content--a crucial component for online companies that want to claim a place alongside TV companies in the media world.

This summer, with its Webcast of Live 8, AOL proved that it could effectively compete with--and outperform--TV stations. AOL was widely hailed by critics for its online coverage of the concerts, while MTV was panned for everything from interrupting the show with commentary to cutting away from key musical acts.

While it's true that AOL has lost millions of dial-up subscribers in the last few years, the company has also been reinventing itself as a free destination for online content--particularly entertainment. With access to Time Warner resources, AOL has made significant inroads into online music, music videos and add-ons to TV shows. AOL has also created its own programs, such as the reality competition "The Biz," which recently launched on the Web.

Yahoo!, a rival of both AOL and Google, still struggles to develop original content, but relies mainly on industry connections to get TV-related streams or tie-ons.

MSN, the other large portal company and fierce rival of Google and AOL, just today announced a content partnership with Jib Jab--but MSN obviously would get a boost from AOL's store of content. In fact, the Journal reported today that MSN remains interested in purchasing a stake in the company.

An MSN-AOL tie-up or a Google-AOL tie-up will shake up the online industry. MSN-AOL together would have a reach of 79 percent, while a Google-AOL partnership would have a 72 percent reach, according to Nielsen//NetRatings.

Those numbers seem large enough to command top dollar for display ads--and to make the combined company a force to be reckoned with, both by marketers and other Internet players.