San Francisco: Time Warner Inc bought back Google Inc`s 5 percent stake in struggling Internet company AOL LLC for USD 283 million, according to a regulatory filing by AOL on Monday.
The price paid on July 8 is close to what Google estimated its stake at earlier this year.
Mountain View-based Google bought the stake for USD 1 billion in 2006, but in January estimated the investment had sunk by more than 70 percent to USD 274 million — giving AOL a market value of about USD 5.5 billion. Time Warner agreed to buy back the stake earlier this year.
The price at which New York-based Time Warner bought back the stake values AOL at less USD 5.66 billion when excluding a cash distribution of unspecified size that was included in the total price.
The repurchase sets the stage for AOL`s impending spinoff from parent Time Warner, which was announced May and is expected to occur later this year. AOL bought the media company in 2001 when its legacy dial-up Internet access business was still extremely popular. That business has been declining for years, and a newer focus on making money from online advertising is not yet picking up the slack.
The filing also gave a slightly more detailed picture of AOL`s finances, showing that the business posted a loss of USD 1.53 billion in 2008 and a profit of USD 82.7 million in the first quarter of 2009 — down 48 percent from USD 159.7 million in the year-ago quarter. The company`s total equity as of March 31 was USD 3.49 billion.
A spokesman for Time Warner and a spokeswoman for AOL said the companies had no comment.