Google and AOL locked down a new five-year search deal Sept. 2, with the former powering search results on the latter's Websites. According to my colleague Clint Boulton, the deal extends to AOL sites accessed from both computers and mobile phones. While financial terms were not disclosed, Jefferies and Co. analyst Youssef Squali believes that AOL could take 90 percent of ad share from the Google-powered searches.

If anyone's benefiting from this deal, it's AOL, which reached its cultural high-water mark back when Bill Clinton was president. Right now, AOL's Web properties reportedly hold a 3 percent market share of the U.S. search market.

"We believe that the resulting search experience from this new deal is likely to slow down the rate of subscriber decline for AOL," Squali wrote in a Sept. 2 research note. "In addition, AOL will be able to feature its own content alongside search and improve the branding, awareness and traffic across its own content network."

Google acquired a 5 percent stake in AOL back in 2005, in a deal worth roughly $1 billion, and then took a bath when it sold that share to Time Warner for $283 million in mid-2009.

What does this mean for Microsoft and Bing? Almost nothing, because Microsoft's search-and-advertising deal with Yahoo effectively gives the company nearly a third of the U.S. search market. Within that context, AOL's 3 percent share is little more than a rounding error. Nor will it likely mean much for Google, strategically, but a deal's a deal.

All that aside, prepare for Microsoft and Google to begin another round of search-engine competition, with lots of saber-rattling and tit-for-tat feature additions: Google is preparing a Sept. 8 event that promises "an inside look at the evolution of Google Search." That will very possibly translate into new elements to the Google search experience, which means Microsoft is likely preparing some gee-wiz Bing features of its own.

Despite spending truckloads of cash over the years on its online properties, with relatively little revenue to show for it, Microsoft knows it needs to stay in the game. As AOL has demonstrated, a few years' worth of missed technological turns--not to mention a handful of ill-advised acquisitions and mergers--can easily reduce a giant to a has-been.