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0 pointstoast06y ago0 comments

Inventory is slots to put ads. AOL had the eyeballs, Google had the platform to turn eyeballs into money, better than AOL was doing by itself. Google provided a guaranteed rate (cpm? cpc?) so that AOL would have confidence it wasn't bait and switch.

See also the Yahoo/Bing deal which didn't work out as well. Microsoft didn't end up actually hitting the targets, and convinced Yahoo to take less; and Yahoo also didn't reduce employee count anywhere near plan on searchy/advertising stuff, so they missed targets on revenue and cost and user experience.

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nostrademons6y ago

"guaranteed rate (cpm? cpc?)"

It was guaranteed revenue IIUC, something like "If you do not make at least $150M from this deal, Google will pay you the difference." That makes the deal a no-brainer for AOL, but puts Google on the hook for any shortfall, which could have potentially ended up bankrupting the company.

toast0OP6y ago

I couldn't find a great description of the deal terms. I did find mention that at least some of the guarantee needed to be paid up front. I suspect the guaranteed payment was contingent on some level of traffic though -- if AOL had turned off the placement, or lost a huge amount of users, then they probably couldn't keep the money.

C1sc0cat6y ago

Cost per mille or cost for 1000 clicks -its an old-school advertising term

reallydude6y ago

CPM = Cost per mill (cost per 1000 views)

CPC = Cost per Click (cost per 1 click)

These terms are widely used today.

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