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AOL not for sale, Time Warner CEO says

Associated Press

LOS ANGELES – Time Warner Inc. is in discussions about finding a partner to boost advertising revenue at its America Online unit – but AOL is not for sale, Chief Executive Dick Parsons said Tuesday.

“We are not interested in selling AOL,” Parsons said at a press briefing before a speech in Los Angeles.

Time Warner is negotiating with different parties about a deal that could help AOL’s transition from a business that relies on paid subscriptions to one that makes money based on advertising revenue, Parsons said.

He declined to give further details.

A Time Warner executive involved in the negotiations, who asked not to be identified because discussions are ongoing, said the company is still talking to both Microsoft Corp. and Google Inc. about potential deals involving AOL. Yahoo Inc. last month removed itself as a potential partner.

The discussions with Microsoft and Google have included the potential for one of the firms to take a stake in AOL, but the person said the discussions are now focusing on simpler arrangements that would involve collaborating on online advertising.

Google already has a partnership with AOL to provide search results. That arrangement accounted for 10 percent of Google’s revenue in the first nine months of 2005 though that figure has declined from previous years as Google’s overall business has expanded.

Google has warned investors that an end to the AOL partnership would be a rare bit of bad news.

The Google-AOL contract runs through part of 2006, but the companies have not given specifics about the time frame.

“AOL is a valued partner and we look forward to continuing to work with them,” Google spokeswoman Lynn Fox said.

A Microsoft spokesman declined comment.

AOL was long considered a drag on Time Warner due to the rapid exodus of its core dial-up Internet users. But AOL has been revamping its business model, opening up its content to all Internet users to tap into the booming market for Internet advertising.

“I think its potential is way large,” Parsons said.

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