Google is currently in negotiations with Time Warner subsidiary AOL for a deal that would give the search engine a 5% stake in the ISP in exchange for a US$1 billion payment. The Wall Street Journal reported on the discussions on Friday (subscription required), noting that Microsoft, which had been in talks with AOL since January, is now shut out of a potential deal.
The agreement would give AOL the ability to sell advertising among the search results displayed by Google on its Web properties, in addition to the opportunity to sell displays ads across the Web publishers in Googleis network.
Google would also promote AOL in its sponsored links and include AOLis online video content in its search results. Google would also extend its deal allowing AOL to use its search technology by five years; that agreement was set to expire at the end of 2006.
Yahoo! was also trying to woo AOL, but it dropped out of talks in early November, according to the news article, which also said that online ad sales in the third quarter jumped 34% over the year-ago period to $3.1 billion. Ads produced by search engine queries made up the largest chunk of those sales.