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AOL Renews Search Alliance With Google For Next Five Years - Update

(RTTNews) - Web service company AOL Inc. (AOL) Thursday said it has renewed its global search partnership with search giant Google Inc. (GOOG) for the next five years and intends to expand the alliance to mobile search and YouTube.

AOL's Chairman and Chief Executive Officer Tim Armstrong said, "After nearly a decade-long partnership in search, we're looking forward to expanding our global relationship to mobile search and YouTube. All aspects of our partnership will be improved by this deal." AOL, which spun off from Time Warner Inc. (TWX) in December 2009, noted that the new partnership deal includes a revenue-sharing arrangement between AOL and Google.

As per the deal, Google will provide AOL with additional features and enhancements to its Web search products. As AOL renewed its focus on mobile apps and content, the companies would work together to expand the alliance to cover mobile search.

AOL also said it has entered into a content partnership with YouTube, which will bring its video content to YouTube.

According to Google, the new partnership deal combines its expertise in search and advertising with AOL's strength in online content. The renewal and expansion of the deal with Google can be viewed as AOL's effort to reposition the company. The company has been developing Internet content and services to boost online ad sales and has been shedding under-performing businesses such as Bebo and ICQ, an instant-messaging service.

New York-based AOL posted second quarter revenues of $584.1 million, down from $791.5 million in the year-ago quarter, hurt by a 27% decline each in advertising and subscription revenues.

AOL is currently trading at $23.04, up $0.14 or 0.61% on a volume of 408,059 shares on the NYSE.

GOOG is trading at $463.13, up 2.80 or 0.61% on a volume of 605,570 shares on the Nasdaq.