Google To Purchase Stake In AOL
The deal, if approved when the Time Warner board meets this week, means that Google will continue to power AOL's search engine for at least five more years; the pay-per-click revenue from those searches alone currently accounts for an estimated 11 percent of gross Google revenue. The deal also reportedly involves AOL selling ads to be displayed on publisher sites within Google's AdSense network.

The combination of Google and AOL potentially creates an online advertising juggernaut. Last month, Google drew 85.5 million unique users and AOL drew 74.3 million uniques; combined, they far overshadow the previous leader, Yahoo!, which garnered 103.8 million uniques.

The deal also thwarts Microsoft's hope that it could promote its search service by replacing Google at AOL. Currently, MSN Search lags far behind both Google and Yahoo! in market share. In October, Google accounted for 48 percent of all searches, followed by Yahoo! at 21.8 percent, and MSN a distant third, at 11.3 percent.

Microsoft had been courting AOL since January, but news of the talks was kept secret until September, when the New York Post revealed the negotiations. After the account was published, Google reportedly also started courting the company.