• NY Times, Tuesday, December 6, 2005 10:15 AM

Following months of negotiations, it looks as though Time Warner won't be selling a stake in its America Online unit after all. Instead, the media conglomerate looks set to either enhance its revenue partnership with Google, or establish a new one with Microsoft at the expense of the search giant. Speaking to one executive involved in the talks, The New York Times reports that Google's terms do not involve any kind of investment in AOL. Rather, Google would extend the 80 percent cut it currently gives AOL for the revenue generated by its search technology on AOL's pages, while possibly agreeing to drive traffic from its sites directly to AOL.com. The negotiations, rumored at one point to involve Comcast Corp., no longer include third parties, instant messaging, or ad sales, the executive said. Microsoft negotiations, on the other hand, may include joint venture in ad sales and instant messaging, as well as a minority stake in AOL. Time Warner apparently wanted $20 billion for AOL, but both Google and Microsoft have backed away from ownership deals. An industry analyst said the most likely outcome will be an improvement in the terms AOL gets from Google.

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