When Time Warner spun off AOL back in late May, they announced they were going to buy back Google’s stake in AOL. They did so in early July. Google’s $1 billion investment for 5% of AOL netted them a whopping $283 million 4 years later. AOL’s valuation has dropped by like 75% — from $20 billion in 2005 to around $5 billion as of the sale.

Hey, Google’s not alone. Facebook lost 1/3 of its value 2 years after Microsoft pumped $250 million into it. (And 2 weeks ago it was valued at $6.5 billion.)

Ultimately none of all this is about ROI — it’s about locking up valuable partners.

Submitted by: Dan Giancaterino, Education Services Manager
on July 28, 2009 - 8:41 am

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