Google and Time Warner’s online division, AOL have reached a final agreement.

For $1 billion dollars, Google is going to own 5% of AOL’s stock. The giant search engine is bound to invest the whole sum of money along the three months to come. Also, AOL is to get a $300 million credit in order to contract ad space through Google’s network.

Starting December 2005, the two companies have begun negotiations as Google has shown interest in owning a stock of its main advertising partner, AOL. Out of the profit Google made from advertising, around 9% was brought in by AOL.

Not only Google was interested in AOL’s shares but Yahoo and Microsoft as well, which was firstly considered favorite. AOL decided for Google. Both companies saw this agreement as a win-win situation. AOL picked Google in order to strengthen its Internet division against other competitors like Yahoo and Microsoft. As far as the search giant is concerned, getting access to instant voice messages and e-mail service provided by AOL could only provide more clients.

Google buys but sells as well. The company made public its intentions of selling over 5 million shares in hope to raise enough capital to start reinvesting in different areas like written press or radio. This way Google could start selling advertising space on almost any media support bringing in more and more money for the business.