Google sold its stake in AOL at a $717 million loss, according to a regulatory filing made on Monday.
Time Warner purchased Google’s 5 per cent share in AOL on July 8 for $308 million, AOL said in a filing with the U.S. Securities and Exchange Commission. Google bought the share of AOL in late 2005 for $1.08 billion.
The purchase paves the way for Time Warner to spin off AOL, a move it has said it plans to finally make by the end of this year. Time Warner has been struggling for years to rid itself of AOL, after merging with the company in 2001.
The combination of the companies didn’t work out as planned. AOL in particular has struggled, failing to make up lost revenue from its shrinking Internet-access subscription business with new revenue from online ads.
Its transition to a business based on ad revenue has not kept up with the rest of the industry. For example, in 2008, U.S. online ad spending grew 11 per cent, according to the Interactive Advertising Bureau, but AOL’s online ad revenue dropped 6 per cent.
Earlier this year Google told Time Warner that it wanted to sell its stake in AOL and wrote down the value of the investment by $790 million. At the time, Google said that AOL remained a valued partner.