Time Warner pays $283 million for Google's AOL stake

By Justin Mann on July 27, 2009, 6:34 PM
As Time Warner prepares to unload the increasing burden that is AOL, they are tying up all the loose ends involved. Part of that required them to buy up all the portions of the company owned by others, most notably Google. The search giant’s stake in AOL sat at 5%, and Time Warner was left with little option but to buy it back from them. It was clear that TW would do just that several months ago, but now a dollar figure has been signed and Google no longer has a stake.

For the sum of $283 million Time Warner aquired Google's shares, which gives AOL as a company itself a rough value of $5.7 billion. That figure may not last, though, as it's clear the company is already on the rocks – no doubt TW will want to move through the spin-off process as fast as possible to avoid losing much value. AOL has already spent tens of millions and expects to spend much more in simple restructuring, as the company attempts to re-invent itself.

For Google's part, they may have suffered a substantial loss here, depending on several factors. They originally offered $1 billion to buy that 5% share, back when the deal was penned in 2005. It was clear then that Google's investment was partly a way for AOL to continue its own existence. It's not fair to say that Google simply lost the $717 million difference in the past five years, for they did get other benefits – such as being the de-facto search provider for AOL – but clearly this situation has not panned out in Google's favor either.




User Comments: 3

Got something to say? Post a comment
raybay said:

AOL will be a Chinese company pretty soon, I suspect.

Time Warner is to be credited for doing the right thing... but there will be a heck of a lot of people out of work within a year.

TechCombo said:

I would still say that Google did lose out somewhat because it is $717 million and TW should be happy with the deal. I wonder how long AOL will last, spending all this money, in the credit crunch, since they need profits also.

JudaZ said:

I would say google didnt loose anything, it was an investment... a PR investment.

Load all comments...

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.