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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