
Google Sells AOL Stake Back To Time Warner For $283 Million - Mystalic
http://www.businessinsider.com/google-sells-aol-stake-back-to-time-warner-for-283-million-2009-7
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michaelfairley
Everyone is claiming that Google lost $700 million in this deal, which is
true, but I think it's more important to notice that by selling now they are
avoiding future losses. It always sucks to sell a stock after you've lost
money on it, but it sucks even more to ride it down further if there's very
little hope of it recovering.

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mikedouglas
It's also important to consider the counterfactual where it was Microsoft who
had landed that search/ad deal. If I remember the discussion correctly, many
considered this a defensive move on Google's part. I can't imagine that Google
had a high opinion of AOL's prospects, so I assume they thought blocking MS
was worth the loss.

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seldo
Well, let's see if was -- they did this in December 2005, meaning the $750m
works out to about $17m per month of the deal. Does Google make more than $17m
per month from its partnership with AOL? Almost certainly, but it probably
hurt a lot. They were expecting to be able to spread the cost over a lot
longer, I'm pretty sure.

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robk
Google already had written this off as a defensive cost to be sure. There's
never been a surprise about this deal not being, prima facie, a good equity
investment. However since it's been publicly traded, losing three points of
market share would have had a much more material effect on the market cap,
such that this made perfect sense to do.

As for how much it generated, I'll bet it was breakeven. Assume Google had a
90/10 or 85/15 revshare with AOL, so Google made maybe $100M-$150M off this
deal if the prior three years' numbers are correct above.

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lionhearted
Any ideas how much Google made from the deal? If they did the same that AOL
did, they made out okay on their investment despite the lower sell price:

> The Google relationship generated $678 million in revenue for AOL in 2008,
> $642 million in 2007, and $573 million in 2006

