Today this Google/AOL rumor has been brewing but now Saul Hansell from the New York Times is reporting that Time Warner “has agreed” to sell a 5% stake in AOL for $1 billion dollars.

Finally, around 9 p.m., Richard D. Parsons, chief executive of Time Warner told Eric E. Schmidt, chief executive of Google, that he would accept Google’s recently sweetened offer. Google, which prides itself on the purity of its search results, agreed to give favored placement to content from AOL throughout its site, something it has never done before.

On the weekly radio show earlier today I had a long monologue about this deal and how I felt Google’s primary goal was to disrupt Microsoft. In some ways I thought AOL would go back to Microsoft to get an even sweeter deal. How about $1.5 billion? I wondered then — and now — if that was part of the Google strategy in these negotiations. If Microsoft had paid much, much more than this 5% stake was actually worth that would translate into greater losses where it ultimately matters (the bottom line).

I don’t think a 5% stake in AOL is worth $1 billion any more than I think 100% stake in Skype was worth more than $3+ billion for eBay. Let’s face it, AOL has been in hemmoraging mode for quite some time. With allegations that trying to escape their membership is like breaking out of Alcatraz, being well known for littering the earth (and new computers) with install CDs, and the opinion of some that they haven’t made the right moves with Winamp or ICQ, this isn’t exactly the pure, consumer-friendly company Google is used to keeping. Although Google is starting to take some hits for some of their Orwellian-like moves. Case recently comparing AOL to Apple was humorous, though.

Score one for Google and another disappointing zero for Microsoft.

It was more important for Microsoft to close this deal then Google to prevent the AOL/Microsoft deal from closing, so this might be a wise billion spent on their part. Google has been frugal (or should I say Froogle, har har) with their swelling coffers, so this could be a sign that they are ready to go war with the greenbacks.

Still, a billion dollars for 5%?

Oh, this could be fun for us spectators. I was curious what Scoble had to say about this and it looks like instead he’s talking about the Xbox 360 shortage and how even their own employees are having trouble buying them. Another Microsoft bleeding wound that badly needs stitches.

Vista better really be something, folks, or this situation could become really, really serious. Despite my tone which might sound all doom and gloom for the big M, I think Redmond still has a few tricks up their sleeves and am looking to see what the brushback is on this one.

Round 2!

• Legal sparring between Google and Microsoft over former employee continue
• Will Microsoft buy stake in AOL?
• MSN Virtual Earth to compete against Google’s Keyhole
• InterActiveCorp pays $1.85 billion for Ask Jeeves
• Google’s money looked better than Microsoft in DoubleClick bidding
• Microsoft wants to buy Yahoo for $31 a share, $44.6 billion deal