If the deal goes through on Tuesday, as expected, it will be a victory for Google against Microsoft Corp, which is trying to make a dent in the online search market.
Microsoft had reportedly been negotiating with Time Warner since January for a stake in its Internet unit.
According to US wire services, Microsoft had proposed to form a joint venture with AOL to sell advertising on their respective sites and others.
But Time Warner’s negotiations with Microsoft reportedly came to an abrupt end late last week, when Google struck a deal, at least in principal, with the company instead.
An AOL-Microsoft alliance would have been an important element in Microsoft’s strategy to gain market share on Google and Yahoo in the online advertising market, w hich is expected to reach $29bn in revenue within the next four years.
But now, apparently, Google stands to boost its leading market position as the largest search-advertising seller. Mountain View, California-based Google will highlight online properties of Time Warner as sponsored links, while AOL will continue to provide its subscribers with Google.
AOL already is a large Google customer. During the first nine months of this year, AOL drove about 10%, or $420m, of Google revenue, mostly from the ads Google distributes on AOL.
Microsoft remains in third place in the US search market, behind Google and Yahoo.
Reports quoting sources familiar with the negotiations appeared Friday on several large US daily newspaper web sites, including The Wall Street Journal and The New York Times, as well as reputable wire services.
Google, Microsoft and Time Warner declined to comment on reports of the deal.
