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AOL buys some of Google's shares

Time Warner might be looking a bit more kindly upon its AOL subsidiary today.

Up until lately, Time Warner may have wondered if it did the right thing by acquiring America Online in January of 2000. Since that day, shares in AOL have consistently fallen and have been pretty much a thorne in Time Warner's financial results. Adding insult to injury, criticism from some of it's shareholders didn't help either.

With Google going public soon, Time Warner's luck could turn to the better. The company has just exercised its options to buy 7.4 million Google shares, or three per cent of the company, for $22 million.

The option to buy was part of a deal struck two years ago, whereby Google provided search and advertising for the AOL website. When Google finally launches its IPO, the shares will be converted to the Class B shares.

However, depending on which overheated analysis you look at, that stake may be worth around $1.3 billion when the search engine company floats later this year.

Source: PC Pro.co.uk

Posted by nakul at May 11, 2004 07:44 AM | TrackBack