The billion-dollar stake Google took in AOL to keep the company out of Microsoft’s hands nearly three years ago doesn’t look like it will approach that value now.

As 2005 neared its close, Microsoft and Google raced to wrap up a transaction with AOL. Its appear stemmed from the visitors AOL received on a daily basis, and the business prospect of serving them with search services and contextual advertising.

AOL represented roughly 10 to 11 percent of Google’s revenue stream. Even with billions of dollars rolling in, giving away that much to Microsoft presented Google with a bitter pill. Google ultimately washed that pill down with a $1 billion investment in a five-percent slice of AOL.

The time for Google to be able to compel AOL to present that slice as an IPO by the holding company with that five-percent stake came on July 1, 2008. Over a month later, there has been no movement toward doing so.

As PaidContent noted from Google’s 10-Q filing, there isn’t much confidence around the Googleplex in AOL’s value.

“Based on our review, we believe our investment in AOL may be impaired. After consideration of the duration of the impairment, as well as the reasons for any decline in value and the potential recovery period, we do not believe that such impairment is ‘other-than-temporary’,” Google said of its latest analysis of the AOL investment.

AOL dealmakers have been actively searching for potential buyers, with a few big names mentioned in passing. It doesn’t look like Google will reclaim its initial investment, but keeping the money rolling in from AOL’s users probably helped to offset the pain it feels today.