Google, AOL Finalize Billion Dollar Deal

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The investment agreement that kept Google’s place as AOL’s search and advertising partner has been hammered out to the satisfaction of both sides.

Google (NASD:GOOG) and AOL’s parent Time Warner (NYSE:TWX) finally found the path clear to completing the blockbuster investment announced by the companies in December 2005, AP reported.

Google and Microsoft (NASDMSFT) both battled for the right to partner with AOL. Google’s loss in the deal seemed a foregone conclusion until mid-December, when AOL decided to stick with Google instead of switching to Microsoft.

Along with the $1 billion investment in AOL in exchange for a 5 percent stake in the business, AOL receives a $300 million credit with Google. That credit permits AOL to purchase advertising on Google and have it placed throughout Google’s extensive network of sites, as well as in the search results generated at Google.com.

In an interesting sidebar to the story, both Time Warner chairman Richard Parsons and Goldman Sachs (NYSE:GS) chairman and CEO Hank Paulson have been mentioned as possible candidates for Treasury Secretary.

The New York Times (NYSE:NYT) claimed incoming White House chief of staff Joshua Bolten wants current Secretary of the Treasure John Snow replaced. Paulson’s firm will be the sole underwriter of Google’s new issuance of 5.3 million shares of stock.

Other Internet Financial News saw eBay (NASDEBAY) issue a statement discussing its opportunity to make an oral argument to the Supreme Court in its patent battle with MercExchange over eBay’s use of “Buy It Now” technology.

The Court however was not swayed by eBay’s contention that federal appeals courts enabled patent holders to easily obtain injunctions against firms using those technologies, CNN reported:

“You’re talking about a property right, and the property right is explicitly the right to exclude others,” Justice Antonin Scalia told eBay’s lawyer. “That’s what a patent right is… give me my property back.”

“I’m not sure you’re going to get… the kind of wide-ranging allowance you seek,” Scalia told the lawyer later.

Also, eBay received added good news from the US Patent Office concerning the patent in question, #5,845,265, issued to MercExchange, and acknowledged that in its statement:

eBay learned on Monday, March 27 that the U.S. Patent and Trademark Office confirmed its earlier decision that MercExchange’s U.S. Patent No. 5,845,265 is obvious and should never have issued as a patent. This ruling is significant since it responds to–and dismisses–the arguments MercExchange raised in its 100-page response to the Patent Office’s previous rejection of all of MercExchange’s claims.

“eBay commends the Patent Office for its willingness to reexamine this patent, and is impressed with the thorough analysis contained in this second office action,” said Jay Monahan, eBay’s Deputy General Counsel of Intellectual Property.

In Europe, Microsoft continued to fight the European Commission’s antitrust regulators over Microsoft’s fulfillment of regulator requirements.

ABCNews said the hearing in Brussels would be Microsoft’s last chance to avoid fines of $2.4 million per day, backdated to December 15th, 2005, for antitrust violations.

EU regulators had slammed Microsoft’s release of technical documentation for Windows Server 2003, saying the company had not provided exact information third-party developers needed to build products that can interoperate with Windows:

“It would be quite sufficient for them to do what they are supposed to do in accordance with the Commission’s decision of March 2004,” (EU spokesman Jonathan Todd) said. “They only have to provide technical interface information to competitors to allow them to make products that are interoperable with Microsoft Windows. That’s all.”

In response, Microsoft senior VP and general counsel Brad Smith said to reporters, “We have complied beyond the requirements of the Commission’s decision. Microsoft is willing to do more … Daily fines are not the solution.”

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David Utter is a staff writer for WebProNews covering technology and business.

Google, AOL Finalize Billion Dollar Deal
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