AOL has right to buy nearly 2 million Google shares

America Online in June 2002 received the five-year warrant to buy the preferred stock, according to Time Warner's annual report. A Google IPO is expected later this year.

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Internet service provider America Online has the right to buy about 1.9 million preferred shares of Google for around $22 million, under a 2002 deal with the world's No. 1 Web search engine, AOL parent Time Warner said in a recent filing.

America Online in June 2002 received the five-year warrant to buy the preferred stock of Google, which is expected to go public later this year.

Following exercise, America Online would have the option to convert the preferred stock into Google common stock. The stock would convert automatically if Google completes an initial public offering, Time Warner said in its annual report filed Monday.

It was not clear what the value of the stock would be, nor what percentage ownership in Google it would represent. An AOL spokesman declined to elaborate on the filing. A Google spokeswoman did not comment.

Google provides Web searches and related advertising services on AOL.com under a deal struck in 2002.

Time Warner's carrying value for the warrant is nil and the warrant has no antidilution provisions.

Under the terms of the warrant, America Online may be required to agree to a 180-day restriction on transfers of Google securities following an IPO and a 90-day restriction with any subsequent public offerings while it holds the warrant or shares received upon exercise of the warrant.

Story Copyright  © 2004 Reuters Limited.  All rights reserved.

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