And the AOL Winner is….Google

Rumor surfacing that AOL is shunning Microsoft and instead deciding to stay put with Google as its search partner.

Time Warner Inc. has entered exclusive talks with Google Inc. over a partnership with AOL, apparently shutting out Microsoft Corp. and other suitors, according to people familiar with the situation.

Update: Not only a partnership, but Google is set to buy a 5% stake in AOL for $1 billion. One step closer to GoogAOL.