Is the world's most valuable Internet company having second thoughts about acquiring a stake in Time Warner's
It's easy to be suspicious. Google received a fair amount of flak for paying so much for such a small stake. Google also put up with Time Warner turning to Microsoft
However, Google still expects the deal to close by no later than June; the pairing just makes too much sense to abandon. AOL is the largest publisher in Google's AdSense network, the third-party publishers that broadcast the company's contextual ads. Losing AOL to a rival like Yahoo! or a fledgling ad network like Microsoft's MSN would cost Google a little in the pocketbook but far more in reputation and strategic advantage.
AOL would also lose if a negotiating stalemate causes the companies to settle for an inferior partnership. One of the few bright spots at Time Warner these past few quarters has been AOL's interactive marketing, and that's mostly Google's handiwork. As AOL seeks to beef up its AOL.com portal, it can't afford to take chances on an unproven network like MSN, which is just beginning to sign up advertisers.
Google and AOL's deal will go through. These negotiations are simply an effort to work out the finer details that will make the arrangement even more positive for both companies. Good things are worth the wait; you'll just have to hold your breath for another three months at worst.
Longtime Fool contributor Rick Munarriz has been an AOL subscriber since 1992, but he doesn't own any of the stocks mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.