Time Warner Inc. and Google Inc. (www.google.com) will team up to take on Yahoo! Inc (www.yahoo.com), Microsoft Corp. and everyone else looking to make money on the Web through an alliance announced Wednesday.
Google is investing $1 billion for a 5% stake of Time Warner's America Online Inc. unit.
Under the deal, Google and AOL will collaborate on video search and showcase AOL's video service within “Google Video.” They'll also create an "AOL Marketplace," which will enable AOL to sell search advertising to advertisers on AOL-owned properties and make AOL content more accessible to Google Web crawlers.
Another key deal point: Google and AOL will enable “Google Talk” and “AOL Instant Messenger” users to communicate with each other.
Google's investment values AOL at $20 billion.
The deal follows weeks of speculation, including word that Microsoft was vying for the stake Google bought in AOL.