BUSINESS
Google free to offload AOL stake
01-07-2008
by The Register
Tuesday is the first day that Google can sell its stake in AOL, picked up in exchange for USD1 billion as part of a wider video and advertising partnership between the two signed in 2005.
The deal either gives Google 5 percent of AOL should there be an initial public offering or gives Time Warner first refusal on the stake.
A filing made to the Securities and Exchange Commission said: "If Google exercises this right, Time Warner will have the right to purchase GoogleÂ’s equity interest for cash or shares of Time Warner common stock based on the appraised fair market value of the equity interest in lieu of conducting an initial public offering."
Time Warner said it could not predict if Google would wish to do this or if Time Warner would pick up the shares.
Google and AOL trumpeted the USD1 billion figure when they announced the deal back in 2005. Observers will no doubt be intrigued to see what as 5 percent slice of AOL would actually fetch these days.
AOL is under investigation by the SEC for allegedly inflating revenues in 2002. Time Warner paid USD300 million to settle fraud charges but the SEC filed civil fraud charges against eight former AOL executives.
The Register and its contents are copyright 2008 Situation Publishing. Reprinted with permission.
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