Google announced that its $1 billion investment in AOL will probably take a hit as the company's value is dropping constantly. When the search king bought the 5 percent stake, AOL was valued at around $20 billion, but now analysts value it at about half.

Meanwhile, sharks are already circling the customer-bleeding AOL. Yahoo and Microsoft are interested in the company's online operations that include an array of advertising tools and services. Meanwhile, the ISP part of AOL is constantly sinking, which is good for those companies eyeing AOL's other assets. However, EarthLink Inc. might snatch up AOL's ISP operations in the future.

Google invested in AOL to thwart Microsoft's bid to take the company over. The $1 billion investment drove up the company's price at the time, in 2006. As part of the deal, Google acquired the right to demand that Time Warner spin off AOL in an initial public offering of stock or buy back its stake. As part of th deal, announced in late 2005, Google also offered a $300 million credit that AOL used to buy keyword-based ads from Google.

Thus Google may soon file impairment charges in its Consolidated Statements of Income. However, boasting $2.55 billion revenue this year alone, the company can easily absorb a few hundred million dollars in diminished value of its holdings.

Also, Time Warner announced Wednesday that it will split AOL's dial-up unit from its advertising business by early 2009.