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Quick Hits: Google, Time Warner Have AOL Buyer's Remorse

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Brief scrutiny of today's headlines.

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In a quarterly report filed with the Securities and Exchange Commission on Thursday, Google (GOOG) revealed that their 5% in AOL -- which cost them $1 billion in 2005 -- may have gone sideways.

This comes one day after AOL's owner, Time Warner (TWX), announced they'll be removing AOL's dial-up unit from its advertising business by early 2009, invoking rumors of a possible sale.

It seems the 2 corporations have finally realized it's not 1997 anymore.

Though AOL still generates an estimated $70 million to $80 million annually for Google via ad revenue, the number of AOL subscribers has plummeted in recent years; the only ones left are your great-aunt Sheila and the almost-sentient SmarterChild chat bot.

Google didn't estimate the current value of its AOL stake,
but analysts peg AOL's entire worth at around $10 billion - roughly half of its $20 billion valuation in the midst of Google's 2005 bidding war with Microsoft. Then again, that was before Microsoft released Vista -when they still had spare cash to invest.

As for Time Warner, the clock's ticking. The company stands to gain more money and a bigger stock boost by parting ways while AOL still brings in money - rather than when it's already dead and buried.

And that moment, it seems, is a week from Tuesday.
No positions in stocks mentioned.
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