Google's $1bn deal with AOL is not about the advertising deal (this is just the free cherry-on-top that blocks MSFT).
The meat of the deal is the access to the millions of AOL instant messenger users, and integrating that with the sparsely populated GTalk. Not to mention AOL's already integrated AIM platform. Comms platforms and pipes is the future.
And you know what? It is a bargain. Take a look at my prior post on this subject.
[Caveat: GOOG risks creditability on favorable AOL ad placement-- and also on any honey pot advice :-)]
Either way, GOOG or MSFT is a cuckoo's egg in the nest, imho.