Google sells AOL stake after writing down more than $700 million

July 28, 2009 · Posted in tech news

Google sold its 5 percent stake in AOL to Time Warner Inc. for $283 million, down from the $1 billion it paid in 2005. This puts AOL’s overall value at about $5.7 billion, less than 30 percent of the company’s $20 billion valuation based on what Google paid four years ago, according to Bloomberg News.

AOL’s slump isn’t new, however: Google already wrote down its investment last year by more than 70 percent as global equity markets plummeted. It’s not a total loss either for the search giant. Google’s original purchase was motivated partly by a need to defend its search and advertising deals with AOL against Microsoft. Since 2006, the company has provided its search technology but under AOL’s brand.

When Google (GOOG) took a 5 percent stake in AOL for $1 billion in 2005, it valued the company at about $20 billion. Last year it wrote down $726 million of that investment…
Google finally sold back its 5 percent stake in AOL to Time Warner. Originally valued at $1 billion in 2005, Google ended up getting back only $283 million, including some cash distributions…
In preparation for the pending spin off, Time Warner (NYSE: TWX) filed a form 10 with the SEC today for AOL Inc., the name the company will be known by as a Delaware corporation…
As Time Warner (TWX) prepares to spin AOL off as a separate company, it’s bought back the 5% stake in AOL that Google (GOOG) bought in 2006 — for almost a quarter of what Google paid for it.