The company made the purchase in 2006, obtaining a 5 per cent stake in the former ISP king and putting AOL's valuation at US$20bn.
Now, Google is warning that its investment in AOL may be worth less than what it was when the deal was made.
In a filing with the SEC, Google said that it believed the investment to be impaired, or depreciated in value. As such, warns Google, the company may be forced to write off losses from the deal in future filings.
The company did, however, express some optimism that AOL could bounce back.
"Based on our review, we believe our investment in AOL may be impaired," read the filing.
"After consideration of the duration of the impairment, as well as the reasons for any decline in value and the potential recovery period, we do not believe that such impairment is other-than-temporary."
Google made the investment in 2006 as part of an advertising deal with the company, which was in the process of making the transition from ISP to content provider and web portal.
Since the investment, AOL has struggled to redefine itself, leading to large-scale layoffs and rumours of a sale by parent company Time Warner.
Google laments AOL buy
By Shaun Nichols on Aug 9, 2008 4:58PM