AOL investment may be impaired: Google

Font Size

Print

Feedback

Email

Discuss

Related Articles

Daiichi Sankyo loses $3.9 bn on RanbaxyDaiichi Sankyo loses $3.9 bn on Ranbaxy'Nokia CEO to favour profit over sales targets'Dutch govt clears Corus work time cuts

San Francisco, August 8: : a February report by brokerage Sanford C. Bernstein, less than 35 per cent of AOL visitors are members, suggesting it is less reliant on dial-up subscribers. The report estimated at the time that AOL's advertising and media business alone could be worth as little as $10.1 billion and its dial-up access business worth about $3.7 billion.

For more than a year, Time Warner has been in informal talks with partners ranging from Yahoo Inc to News Corp (NWSa.N: Quote, Profile, Research) on potential deals involving its AOL unit, sources have previously said.

To put the $1 billion investment in perspective, Google had $12.7 billion in cash as of June 30. It generated $1.77 billion in cash from operations in the second quarter from sales of advertising sold alongside search results on Google.com and affiliated Web sites such as AOL, MySpace and Ask.com.

Google also gets an estimated $70 million to $80 million annually from AOL by providing search ad services, and is unlikely to want to risk AOL taking its business to rivals, analysts say.