Google, which has a 5 percent stake in Time Warner's AOL, now has the right to force the media conglomerate to bring its Internet division to the market.
But Time Warner investors should not hold their breath if they think this is an opportunity for the media company to finally rid itself of the legacy of its disastrous 2001 Internet merger, once hailed as the deal of the century.
A clause in Google's 2005 purchase agreement for the AOL stake gives the Web search leader the right, but not the obligation, to force a public offering of the shares or a repurchase at fair market value as of July 1, 2008.
But at current market valuations, Google stands to lose an estimated $500 million if AOL is taken to market, analysts estimate. The $20 billion valuation of AOL, established at the time by Google's $1 billion investment, has been cut to as low as half of that in some projections.
"Under the current market and strategic conditions, Google is unlikely to rock the boat," Jeffrey Lindsay, an analyst for Bernstein Research, said.
Analysts and investors also say that Google is enjoying the estimated $70 million to $80 million it receives annually from AOL by providing search advertising services, and is unlikely to want to risk AOL's taking its business to rivals.
The July 1 date was viewed months ago as a catalyst for the Time Warner board of directors to speed discussions to spin off or sell AOL to any interested party, including Yahoo, Microsoft or News Corp.
That is because a similar scenario played out when Comcast sought to resolve its 21 percent stake in Time Warner Cable in 2003. The two agreed to buy and divide the assets of the bankrupt cable operator Adelphia, and the deal eventually led to the partial spinoff of Time...

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