Time Warner buys up Google stake in AOL for $283m
NEW YORK - Google has sold its 5% stake in AOL back to Time Warner for $283m three years on from when it was valued at $1bn.
The sale of the stake comes ahead of Time Warner's plan to spin off its internet division as a separate company later this year eight years after the two were joined in a $100bn dotcom boom merger.
The $283m price that Time Warner has paid to acquire the stake puts a value on AOL of around $5.7bn. Three years ago the firm was valued at $20bn.
In its registration to the Securities and Exchange Commission AOL said that it expects to incur as much as an additional $90m for the duration of 2009 and of its flotation on the New York Stock Exchange.
This comes on top of $58m in restructuring charges incurred in the first quarter of 2009 as it laid off more than 700 staff and closed offices.
It is thought that Google will continue to provide search services to AOL at least for the rest of year as part of the five year advertising deal between the two.
Armstrong, the former Google sales executive, has a three-year contract with AOL and will earn at least $1m a year in salary and up to $4m a year in bonuses the paper said.
In addition he will receive $10m worth of options and restricted stock for 2009 and 2010 as compensation for leaving Google.
Last week Armstrong laid out his vision for AOL which he said would focus primarily on advertising and content.
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