Google Buying 5% of AOL for $1 Billion

[Marcia]

Details here:

SEC Filing for Google/GOOG (http://biz.yahoo.com/e/051223/goog8-k.html)

Investment by Google in AOL (the "AOL Investment")

• Investment. In exchange for $1 billion, we will acquire a 5% equity interest in AOL through an investment in a limited liability company ("HoldCo") that will own all of the outstanding equity interests in AOL.

[B-Double-U]

My guess is that it is cheaper to do that and obtain the R&D in progress than to start from scratch. Plus, you get a nice jumpstart time wise...

It's funny; I was just having a conversation yesterday about buying a technology and using it as a platform for an in-house project. The problem is that you have to weigh against time as well as resources to find the breakeven point. Either way, you usually want to get started immediately... so I ended up blurting out.

"While there's no time LIKE the present there's also no time IN the present"

We smiled and moved on......

[sportsguy]

Well, it's not like Google DOESN'T have user data to help build a community for themselves...

[vayapues]

5% is such a small piece of the pie. Is it really enough to have any influence? Maybe I will be wrong, but I think AOL will continue its downward plunge, becoming less and less important over time.

They are still a major player to be sure, but, 1 billion?

[GaryTheScubaDiver]

I think its a good move. AOL people are a breed of their own, and they'll buy anything online. I started out an AOL person. waaay back when I had gary@aol.com* as my email. (now you know that was awhile back!)

I can see plenty of room for influence as well. Look at the major shareholders; executive management. What does either party have to lose?

Google is already a big part of AOL (search, adwords). They obviously see potential there.I would be suprised to learn that they aren't already planning big ventures and that those ventures may have sparked this move.