What are the most significant aspects of the AOL-Google deal?

First and foremost, it validates AOL’s valuation as a $20 billion (£11bn) company. As the "will they-won’t they" speculation continues on whether or not Time Warner will spin AOL out as a separate entity, at least there is a clear picture on the market value of the proposition.

Second, the nuisance factor to Microsoft is significant. The AOL-Google deal will hit Microsoft’s bottom line - Microsoft had been bidding for the contract to supply AOL's search facility, estimated to start at $600 million (£345m) a year. Microsoft was expected to win the search business until the rumor mill started turning out that AOL was in talks with Google. In the process, Microsoft loses out on having its search technology endorsed by a third party.

More importantly, it stokes the "Who owns the desktop?" debate. Galvanising AOL’s market position keeps them firmly on the radar and is beneficial to Google as their own desktop products gain momentum and market share.

Meanwhile, not unlike the eBay acquisition of Skype, the internet telephony group, earlier this year, it delivers a different customer demographic for Google. For example, AOL provides access to younger consumers and the "kid dollar". This demographic should be relatively straightforward to "monetise".

Finally, it’s one giant leap towards Google becoming a portal.

Who comes out of it in the best shape?

Both sides will benefit from the alliance – but Google definitely has the edge.

The deal gives Google an opportunity to sell display ads and develop new business models which will attract a new type of advertiser who may have previously spent some of their budget on Google’s text-based ads, but are now very likely to spend more with Google as their advertising options increase.

Plus, even as a minority shareholder, Google can have an impact on AOL’s future – especially with regards to floatation, not to mention what a nice little earner AOL could be for them on exit.

Is this a real hit for Microsoft - how can and will it respond?

Probably not a big hit, but it will be interesting to see how Microsoft does respond.

It's a very tricky question. Microsoft already has a lot in the pipeline and its arsenal for investments means anything can happen.

Is Google's reputation as an "honest broker" in information in danger through a link with AOL?

It’s unlikely.

Google’s a great brand and they have consistently made surgical hits in their acquisition and investment strategies while remaining consistent with their branding and product offering.

Indeed, I would expect Google to bend over backwards to ensure they maintain their "honest broker" status. We will have to wait and see what "favored placement" – which under the terms of the deal, Google will give to content from AOL – actually means.

Julie Meyer runs Ariadne Capital, the technology investment and advisory firm, www.ariadnecapital.com

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