AOL Updates: 3-Way Deal Doesn’t Stop Google’s Search Dominance

With the much awaited 3-way deal between AOL (NYSE:AOL), Yahoo (NASDAQ:YHOO) and Microsoft (NASDAQ:MSFT) finally through, ^[1] AOL hope to get a boost in online advertising revenue. The company’s shares have certainly pulled themselves up from the below-$12 prices just a month back ^[2] and can maintain the $15-level as long as shareholders continue to remain confident of AOL’s display ad business.

Meanwhile, Google is Search

While AOL has managed to stay resilient in the display advertising segment, recent statistics keep affirming Google’s (NASDAQ:GOOG) continuously growing its dominance in the search segment. According to comScore, Google’s U.S. search market share has surged further ahead in October to 65.6% from 65.3% last month. ^[3]

We have a revised price estimate of $14 for AOL stock, which is roughly 4% below the current market price.

See our complete analysis for AOL’s stock here

1. Reuters: Microsoft, AOL, Yahoo strike ad alliance [↩]
2. Google Finance: AOL [↩]
3. comScore Releases October 2011 U.S. Search Engine Rankings [↩]