The preparations for the AOL spin-off are going ahead as scheduled at Time Warner, with the media giant buying back Google's 5 percent share in the Internet company for $283 million. The deal was revealed in a regulatory SEC filing on Monday as part of the legal process for the spin-off. Google bought the 5 percent share back in 2005 for $1 billion, leaving the Internet giant with a roughly $700 million hole.

Time Warner bought the shares on July 8 and the price included some cash distributions owed to Google. In fact, the search giant had already written down $726 million of the investment last year. The deal puts AOL's value at $5.66 billion, a fraction of the $20 billion 2005 valuation. The two companies struck a deal four years ago, with Google providing all of the search capabilities and the advertising that went with them to AOL. In turn the companies would share the revenue from the ads.

The deal is set to go on at least until December 2010 and has already brought the search giant a significant amount of money. While AOL only owns a 3 percent share of the search market, this adds to Google's total share making for some decent revenue, so the company may have already recouped its investment or at least a large part of it.

Also, the $5.66 billion valuation represents the rock bottom price for AOL and experts believe that when it will be ready for the initial public offer the company will fetch north of that. The merger between the two media giants was seen as one of the biggest deals of its day but has since gone sour with the Internet company gradually losing revenue and significance. Now Time Warner wants to spin-off AOL into a separate company sometime later this year with new CEO Tim Armstrong repositioning the company as a publishing giant along with other main points of interest.