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Google, Comcast in talks on buying stake in AOL

Google Inc and Comcast Corp are talking with Time Warner Inc about acquiring ownership stakes in America Online's Web portal AOL, a person familiar with the discussions said on Wednesday.

Under the deal, the three companies would form a new entity through which they would jointly own the Web portal, according to the person, who requested anonymity because the release of the information was not authorized.

AOL has been successful of late at generating online content, but America Online's business prospects have suffered as more people switch from dial-up Internet access to high-speed connections.

If the deal is finalized, one possibility would be for the AOL portal to replace the broadband Internet Web sites of New York-based Time Warner and Comcast.

The three firms plan to leverage their content and consumer reach to create a Web portal powerhouse, the person said. Google is the nation's most popular search engine, while Comcast and Time Warner are the top two cable operators.

The preliminary discussions follow reports that one of Google's biggest rivals, Microsoft Corp, and Time Warner have been discussing for several months a possible alliance that would unite AOL with MSN, another major portal.

A deal between AOL and MSN would loom as a financial threat to Google because AOL is the biggest player in its online advertising network. AOL accounted for 11 percent of Google's US$2.6 billion in revenue during the first half of this year.

Mountain View, California-based Google contacted Comcast last week to gauge the cable giant's interest in such a deal, the person said. Philadelphia-based Comcast had been on the prowl for content to avoid the commoditization of its cable lines.

No price for any deal has yet been discussed, as the talks remain at an early stage, this person said. It's not clear how closely Google and Comcast are aligned in their talks with Time Warner, the Wall Street Journal reported on Wednesday in its online edition.

Google has been seeking a closer relationship with cable operators because of their close ties with content programmers.

Asked about the deal, a Google spokesman said on Wednesday that "Google and AOL have a healthy global partnership, and AOL remains a valued partner. Your inquiry is about rumored conversations and we're not able to respond to questions of this type."
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