BigShinyThing

CNN, amongst others, reports that Time Warner Inc. is in exclusive talks with Google Inc. about broadening a partnership with Time Warner’s AOL online service. Microsoft Corp., once considered the front-runner for a deal with AOL, is believed to be out of the running.

The Google-AOL talks would expand on a relationship which analysts estimate account for 2 percent to 4 percent of Google’s revenue on a net basis. AOL uses Google’s search engine, and Microsoft had been negotiating to get AOL to use its search technology instead.

AOL is seen as a critical swing factor on search technology traffic among Internet media rivals Google, Microsoft and Yahoo Inc., just as it once was with online advertising, a category it practically invented in the early 1990s. According to the Time Warner owned CNN, “AOL made surfing the Internet and chatting online a household phenomenon. But it has been a drag on Time Warner’s stock as it has lost millions of dialup Internet subscribers since the merger of America Online and Time Warner in 2001. Since then, the Dulles, Virginia-based unit has focused on providing free programming and services to boost online advertising revenue.”

TheAOL/Time Warner merger is considered by many to have been one of the more disastrous follies of the dotcom era. AOL founder Steve Case last week backed calls for AOL to be split from Time Warner. He told the Washington Post that “Time Warner has proven to be too big, too complex, too conflicted and too slow-moving - in other words, too much like a classic conglomerate - to seize new opportunities.”