Google's Billon Dollar Stake In AOL Loses Value

Google struck what appears to be a sensible deal back in 2006 when it purchased a 5 percent stake in AOL for one billion dollar valuing ISP and content publisher AOL at USD 20 billion.

Now in a filing with the SEC, Google has revealed last week that its AOL investment might actually be impaired or in layman's terms, losing value in absolute terms.

The internet company has not ruled out the possibility of a one-off charge in the future, which could hit its bottom line.

"Based on our review, we believe our investment in AOL may be impaired... We will continue to review this investment for impairment in the future. There can be no assurance that impairment charges will not be required in the future, and any such amounts may be material to our consolidated statements of income," Google's SEC filing indicates.

Interestingly, Google's share price has been rising ever since the news was released on Friday, reaching USD 495.01 at the end of the day.

ZDnet understands that Google's losses could be as high as USD 500 million which would slash AOL's valuation to USD 10 billion, bad news for Time Warner, its owner, which could possibly hasten the sale of AOL before its value diminishes further.