Google the One for AOL?


Time Warner Inc. is now dealing exclusively with Google Inc. in creating a broad new relationship with its America Online Inc. Internet service, according to a report published Friday by The Wall Street Journal.

Shut out is Microsoft Corp., which had been seeking ways to combine aspects of its search services with AOL.

Also out of the picture now is Comcast Corp., the nation’s largest cable operator. A senior industry executive familiar with the negotiations told Multichannel News Comcast is no longer involved. The MSO had been, at one point, willing to be a partner in a joint effort with Google to buy a stake in AOL.

Time Warner has held talks with Microsoft since January about forging a relationship with the software juggernaut’s MSN search engine, as the media conglomerate has looked to accelerate AOL’s transition from a subscription-based service to one that depends more on advertising sales. Google, which already has an advertising relationship with AOL, entered the talks in September.

According to the Journal, citing a person close to the situation, the negotiations are centered around allowing AOL to sell advertising in the search results Google provides on its Web properties. Google is also likely to promote AOL’s Web sites via sponsored links on its search results, and it would pay $1 billion for a 5% interest in AOL, the Journal reported.

The Journal reported that a deal could be reached as soon as next week, after Time Warner’s regularly scheduled board of directors meeting Dec. 21.

Time Warner spokeswoman Susan Duffy declined to comment. Google spokeswoman Lynn Fox did not return phone calls for comment.

Earlier this month, Microsoft was considered to be a front-runner for an AOL deal, primarily because it had agreed to guarantee AOL minimum ad revenue as part of the partnership. But Google -- which derives about 10% of its annual advertising revenue from AOL -- was said to be still in the running.

For more on AOL and Google, please see Mike Farrell’s story on page 8 of Monday’s issue of Multichannel News.