Feeds

Google's AOL stake walks the plank

A $726m loss? We'll take it

Protecting users from Firesheep and other Sidejacking attacks with SSL

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
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.