Google sells AOL stake after writing down more than $700 million
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.
Meanwhile, back at AOL, chief executive Tim Armstrong is saying that “a big part of fixing AOL is getting AOL to believe in itself.”
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About the Author, Kim-Mai Cutler
Kim-Mai was born and raised a stone's throw from Apple headquarters in Cupertino by a devout Hewlett-Packard family. After attending UC Berkeley, Kim-Mai worked for Bloomberg, The Wall Street Journal and Dow Jones Newswires in New York, Los Angeles, London and Buenos Aires. Follow her on Twitter at @kimmaicutler, and follow VentureBeat on Twitter at @venturebeat.
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