• Silicon Alley Insider, Friday, December 14, 2007 11:30 AM

More proof that Time Warner may be preparing to unload AOL: Google has the right to force Time Warner to take AOL public, or the media conglomerate runs the risk of search giant buying back its 5 percent stake in AOL. Back in December 2005, Google agreed to invest $1 billion in the beleaguered Web portal, a deal that strengthened the companies' ties (Google also powers AOL's search engine). As part of the deal, Google has the right to force Time Warner to conduct an AOL IPO or buyback its stake "at fair market value" on July 1, 2008.

Since that time, AOL's fair market value "has deteriorated significantly" from the $20 billion it was worth when Google bought the stake. The search giant won't want to take a loss on its investment, and Time Warner and AOL won't want to risk losing that search partnership, which makes a near-term AOL spin off (and Time Warner break-up) more likely.

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