Feeds

Google's AOL stake walks the plank

A $726m loss? We'll take it

Internet Security Threat Report 2014

Google recently stomached a $726m write-down thanks to its stake in the increasingly-irrelevant America Online. And now it looks like the search giant wants out of its AOL investment entirely.

Today, during his quarterly earnings call with reporters and analysts, Time Warner CEO John Martin said that Google recently asked if it could exercise the so-called "demand registration rights" for its 5 per cent stake in AOL.

In other words, Google has asked Time Warner to either buy back its three-year-old AOL stake or spin AOL off as a public company. "We are reviewing the request. But we have several options, including proceeding with the request, delaying a decision for some time or buying back Google’s stake at an appraised value, which would obviously be well below the original amount," Martin said, according to All Things Digital.

Considering the state of the economy - not to mention AOL's gradual descent into complete irrelevance - it's unlikely Time Warner would take the company public. We can only assume the media giant will buy back Google's share - if that's what Google wants. Google paid $1bn for the five per cent stake back in 2003, and now the market value is down to about $274m.

As others have speculated, Google's Time Warner request may be its way of encouraging Time Warner to extend its search deal with AOL. Google currently provides both paid and un-paid search results on AOL.

But voices are also wondering whether Google is angling to update the deal so it can continue serving AOL search results even if the company is sold to a third party. There's been some talk, you may have noticed, about Yahoo! nabbing AOL.

Google did not immediately respond to a request for comment.

During Google's latest earnings call, CEO Eric Schmidt said that the company's AOL deal and its investment in WiMAX struggler Clearwire "made sense to us then and make sense to us now and continue to be a strategic part of our overall business philosophy."

But Schmidt likes to spin. Google may be happy with the $274m its AOL stake would bring today. It'll bring even less tomorrow.

In Q4, Time Warner says, AOL revenues dipped to $968m, a 23 per cent fall from the year before. Ad revenue fell 18 per cent, and subscription revenue fell 27 per cent. ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
Bladerunner sequel might actually be good. Harrison Ford is in it
Go ahead, you're all clear, kid... Sorry, wrong film
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
Euro Parliament VOTES to BREAK UP GOOGLE. Er, OK then
It CANNA do it, captain.They DON'T have the POWER!
Forget Hillary, HP's ex CARLY FIORINA 'wants to be next US Prez'
Former CEO has political ambitions again, according to Washington DC sources
prev story

Whitepapers

Go beyond APM with real-time IT operations analytics
How IT operations teams can harness the wealth of wire data already flowing through their environment for real-time operational intelligence.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Why CIOs should rethink endpoint data protection in the age of mobility
Assessing trends in data protection, specifically with respect to mobile devices, BYOD, and remote employees.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Seattle children’s accelerates Citrix login times by 500% with cross-tier insight
Seattle Children’s is a leading research hospital with a large and growing Citrix XenDesktop deployment. See how they used ExtraHop to accelerate launch times.