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Wednesday, December 21, 2005
Google, AOL Tie Up in Strategic Alliance


Google is investing one billion dollars to take a five-percent stake in Time Warner's America Online unit as part of a major strategic alliance, the companies announced.

They said the agreement, which shuts out software giant Microsoft from a rumoured AOL tie-up, will create a global online advertising partnership and make more of AOL's content available to Google users.

Time Warner chief executive Dick Parsons said the alliance was the right choice for his troubled media group.

"We're very pleased to build significantly on our special relationship with Google in a way that will meaningfully strengthen AOL's position in the fast-growing online advertising business and help drive more advertisers to its Web properties," he said in a statement.

AOL, whose 2000 merger with Time Warner was much acclaimed at the time but has now gone emphatically sour, has been struggling as consumers shift to high-speed Internet providers.

Until recently, Microsoft had been seen as a strong candidate for a partnership with the contents provider, but Google and Time Warner made clear that no other company would be allowed to enter the new alliance.

Google already has a sponsored-ad relationship with AOL but is keen to add new content as it carves out an ambitious strategy to become a one-stop-shop on the Internet that does far more than just run searches of websites.

The companies said they would explore giving an international reach to AOL Marketplace, a popular classified ads section of AOL's US portal.

They will also expand display advertising throughout the Google network, make AOL content more accessible to Google users, collaborate in a video search engine, and make the Google and AOL instant messaging services compatible.


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