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Google Gains Right To Sell AOL Stake

Unlikely move would cause chaos

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Google’s owned a five percent stake in AOL for the better part of three years.  Now, thanks to the passage of time and the terms of their partnership, the search giant’s getting the option of escaping.

Reuters reports, "A clause in Google’s 2005 purchase agreement for the AOL stake gives the Web search leader the right, but not the obligation, to force a public offering of the shares or a repurchase at fair market value beginning July 1, 2008."

Google
 

Time Warner might or might not fork over some cash or shares if it was pushed.  An AOL IPO would be messy, though.  The division is more or less synonymous with Time Warner, and there aren’t many indications that it could be successful on its own.  Then there’s the market’s condition to consider; it isn’t conducive to any IPOs.

Reuters adds, "Analysts and investors also say Google is enjoying an estimated $70 million to $80 million it gets annually from AOL by providing search advertising services, and is unlikely to want to risk AOL taking its business to rivals."  And since AOL’s worth less now than it was in 2005, Google would definitely lose some money.

So it seems as if few people will be encouraging Google to separate itself from AOL.  But this option is something to keep in mind, at least, if anything interesting happens to either company.

Google Gains Right To Sell AOL Stake
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