Google Wants Out of AOL Investment

Measured strictly in terms of financial returns, Google’s investment in AOL has been a dud. In 2005, Google paid $1 billion for a 5 percent stake in AOL, valuing the Time Warner unit at $20 billion. Last month, Google wrote down the value of that investment by $726 million, which assumes AOL’s new valuation is $5.5 billion.

Now, Google wants what’s left of its money back.

During a conference call with investors, Time Warner executives said that Google notified the company last week that it planned to exercise its “demand registration rights,” which would essentially force Time Warner to buy back Google’s stake in AOL or spin off AOL and take it public. John Martin, Time Warner’s chief financial officer, said that the company was evaluating its options.

In a statement, Google acknowledged the request: “AOL remains an extremely valued partner, and we’ll continue to work closely together to provide their users with the best search experience possible. After careful consideration, we made the decision that we needed to exercise our rights now so we could be in a position to sell our interest when the timing made sense for us.” Read More>>

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