CEO Jeff Bewkes said on the Time Warner (NYSE: TWX) call that Google has demanded that it either spin off AOL as a separate public company or buy Google's 5 percent stake at fair-market value; Google recently wrote down its AOL investment by nearly $750 million. Google has the right to make such demands according to the agreement the two companies entered into when Google purchased its stake.
Bewkes said he is exploring his options, but it's pretty clear the company either needs to take AOL public (very unlikely) or pay Google (NSDQ: GOOG). The only other option is to get Google to agree to withdraw its right as part of a separate larger agreement, but that, too, is unlikely.
By Rory Maher