Google Inc. is set to buy 5 percent of America Online Inc. It will take a chunk from their cash reserves as the deal is set to go as high as one billion dollars.

The five year deal gives AOL some new life by offering its wares through premium advertisement spots on Google search pages and whatnot. It also gives Google access to AOL’s millions of subscribers and their locked in content window.

Google will also continue to be the search enging backing AOL user searches, and they will give AOL exclusive rights to sell online banner ads for Google. AOL will keep 20 percent of the proceeds while Google will get around 80 percent.

Google stock rose $7.62 yesterday to $430.15 a share after news of its deal with AOL leaked. Just a reminder to all those out there, Google went public in August 2004 at $85 a share. (I wish I had gotten a few shares of Google at $85 a share…I would be a much richer man)

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