Finally some more news on the Microsoft\/Google deal with AOL!<\/p>\n
Online search engine Google has confirmed it will invest $1bn to take a 5% stake in Time Warner’s AOL unit as part of a major strategic alliance.
\nThe deal, which follows intense negotiations between the two US internet giants, values the troubled AOL unit at $20bn.<\/p>\nThe global online advertising partnership will make more of AOL’s content available to Google users.<\/p>\n
The agreement shuts out software giant Microsoft from a rumoured AOL tie-up.<\/p>\n
“We’re very pleased to build significantly on our special relationship with Google,” said Time Warner chief executive Dick Parsons.<\/p>\n
Microsoft threat<\/p>\n
Microsoft was also said to have been considering buying a stake in AOL, with a view to integrating its own internet service into the company.<\/p>\n
The tie-up between Google and AOL demonstrates Google is prepared to pay heavily to prevent Microsoft from becoming a bigger player in the lucrative internet search sector.<\/p>\n
AOL is currently Google’s biggest customer. During the first nine months of the year, it accounted for about $429m, or 10%, of Google’s revenue.<\/p>\n
Time Warner has been seeking a partner to boost AOL’s value, which would in turn lift the US media giant’s shares.<\/p>\n
The company has seen its share price plunge since its takeover of AOL in 2000 – sinking from highs above $85 to about $18 currently.<\/p>\n
AOL founder Steve Case last week backed calls for AOL to be split from Time Warner.<\/p>\n
Yahoo had also been in talks with Time Warner but dropped out in November, reportedly because the media giant wanted to retain a majority stake in AOL.<\/p><\/blockquote>\n