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Google to Invest $1 Billion in AOL

According to the New York Times -- Rebuffing aggressive overtures from Microsoft, Time Warner has agreed to sell a 5 percent stake in America Online (AOL) to Google for $1 billion as part of an expanded partnership between AOL, once the dominant company on the Internet, and Google, the current online king.

While the deal terms are largely set, it will not be final until it is ratified by the Time Warner board on Tuesday, according to an executive who was briefed on the negotiations.

The executive said negotiations between the three companies reached a fevered pitch on Thursday night when teams from Google and Microsoft were in separate rooms of the Time Warner Center in Manhattan and executives from the media company walked back and forth between them.

The deal helps Google fend off what could have been a significant challenge from a combination of AOL and Microsoft and cements its position as far and away the largest seller of search advertising.

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