Google laments AOL buy

Google may take a hit over its decision to invest in AOL

Google has suggested that it may lose money over its $1bn investment in AOL.

The company made the purchase in 2006, obtaining a five per cent stake in the former ISP king and putting AOL's value at $20bn.

Now Google is warning that its investment in AOL may be worth less than it was when the deal was made.

In a filing with the SEC, Google said it believed the investment to be impaired or depreciated in value. As such, warns Google, the company may be forced to write off losses from the deal in future filings.

"Based on our review, we believe our investment in AOL may be impaired," read the filing.

The company did, however, express some optimism that AOL could bounce back.

"After consideration of the duration of the impairment, as well as the reasons for any decline in value and the potential recovery period, we do not believe that such impairment is other than temporary."

Google made the investment in 2006 as part of an advertising deal with the company, which was in the process of making the transition from ISP to content provider and web portal.

Since the investment AOL has struggled to redefine itself, leading to large-scale layoffs and rumours of a sale by parent company Time Warner.