News
Google To Close AOL Investment in 2Q
Google Inc. said Thursday it expects to complete its $1 billion investment in America Online during the second quarter, slightly later than the two popular Web sites originally anticipated.
When the online search engine leader announced its plan to buy a 5 percent stake in AOL three months ago, the two sides predicted the $1 billion would be invested before the end of March. Mountain View, Calif.-based Google now expects to make the investment some time during the three months ending in June, according to a Securities and Exchange Commission filing.
The SEC documents didn't specify the reasons for the delay, but indicated Google and AOL need additional time to work out the final details of their expanded alliance.
AOL, owned by Time Warner Inc., already ranks as Google's biggest business partner. Ads distributed from Google's search engine to AOL's Web site generated about $550 million, or 9 percent, of Google's revenue last year, according to Google's annual report, which also was filed Thursday.
The new arrangement will extend beyond the extra cash being infused into AOL, which rebuffed Microsoft Corp. to strengthen its ties with Google.
AOL also will get a $300 million credit to advertise its products and services through Google's vast marketing network. Google, in turn, is depending on AOL to sell more graphical ads to help diversify its search engine beyond the text-based ads that generate most of the company's profits.
In its annual report, Google disclosed it will pay up to $130.5 million in cash and stock for acquisitions completed last year. The 15 acquired companies were mostly little-known startups. The list included three makers of software for wireless telephones -- Android, Dodgeball and Reqwireless -- and Urchin Software, which analyzes Internet traffic patterns.
Google also said it expects to award its employees with company stock valued at $342 million during 2006, up from $201 million last year.