AOL and Google Team Up for Online Video Offering

Google Inc. (www.google.com) and America Online, Inc., a wholly owned subsidiary of Time Warner Inc. (NYSE: TWX), today announced that they are expanding their current strategic alliance.

The agreement creates a global online advertising partnership, makes more of AOL's industry-leading content available to Google users, and includes a $1 billion investment in AOL by Google.

Jonathan Miller, AOL's Chairman and Chief Executive Officer, said: "AOL and Google have a very successful history working together, and this is an opportunity to take it to a new level that will benefit both companies and the customers we serve. We are excited about working with Google on the next generation of AOL products, while further expanding our presence on the Web. This is a great moment for AOL."

Time Warner Chairman and Chief Executive Officer Dick Parsons said: "We're very pleased to build significantly on our special relationship with Google in a way that will meaningfully strengthen AOL's position in the fast-growing online advertising business and help drive more advertisers to its Web properties. This agreement is key to fulfilling our commitment to realize the potential of AOL's very large online audience."

Google Chief Executive Officer Eric Schmidt said: "AOL is one of Google's longest-standing partners, and we are thrilled to strengthen and expand our relationship. Today's agreement leverages technologies from both companies to connect Google users worldwide to a wealth of new content.

We've also created a simple way for AOL Marketplace advertisers to buy and place search-related advertising across the AOL network. This partnership is an important next step for our companies."

Under the strategic alliance, Google and AOL will continue providing search technology to AOL's network of Internet properties worldwide.

AOL and Google have also agreed to extend the term of their existing European relationship, and, subject to mutual agreement, they may extend the AOL Marketplace internationally. In addition, Google, AOL and Time Warner may choose to expand the new partnership to Time Warner's other advertising opportunities.

Google will invest $1 billion for an effective 5% equity stake in America Online, Inc., allowing the company to participate in AOL's future success. Google will become the only shareholder in AOL other than Time Warner.

Time Warner will retain management control and full strategic flexibility over AOL, while Google will have certain customary minority shareholder rights, including those associated with any future sale or public offering of AOL. Additional financial terms of the agreement were not disclosed.

Don Logan, Chairman of Time Warner's Media & Communications Group, said: "We look forward to working with Google to extend our successful paid-search partnership to other forms of advertising. In addition, we're excited about the potential for driving more traffic to our network of Internet properties."

Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets.

America Online, Inc. and its subsidiaries operate a leading network of Web brands and the largest Internet access subscription service in the United States. Brands include the AOL® service, the AOL.com® website, and the AIM®, MapQuest®, Moviefone®, Netscape®, CompuServe® and ICQ® services. America Online offers a range of digital services including the TotalTalk® voice service.

Time Warner Inc. is a leading media and entertainment company, whose businesses include interactive services, cable systems, filmed entertainment, television networks and publishing.