Google: We Have No Idea Why We Bought Into The Inferior AOL

Google announced today that an analysis of its $1 billion investment stake in advertising partner AOL is souring and that it could lead to a substantial charge against its future earnings.

Google bought a 5 percent AOL stake in 2005, largely to lock up AOL as an advertising partner. It is not clear how much Google has earned from supplying AOL advertising, which would make it possible to understand whether the purchase of the AOL stake actually made any sense.

As for the deterioration of the AOL stake, Google said in an SEC filing late yesterday:

There can be no assurance that impairment charges will not be required in the future, and any such amounts may be material

This won't, however, cause Treasury Secretary Paulson to go into his rescue mode. After all, it' s only a billion dollars, and in the first half of this year, alone, Google earned $2.55 billion.