Speculation about a pending deal between AOL and Microsoft was put to rest by the announcement that AOL has chosen to continue its relationship with Google. Under the new enhanced agreement, Google will pay out $1 billion for a five percent stake in AOL, making it the only shareholder of AOL other than Time Warner. The two companies are planning to collaborate on their respective video projects (i.e., AOL’s premium video service and the Google Video product). And AOL’s content will now be much more accessible via Google’s web crawlers, allowing users and content to be matched more easily. Maybe next time, Microsoft.

Subscription-based radio services, made popular by XM Satellite Radio and Sirius Satellite Radio, offer hundreds of channels of music and talk radio to consumers who pay a $13 monthly fee and purchase a special satellite-radio receiver. Now these receivers are allowing listeners to record hours of programming. Some are calling it "…an iPod that pulls down the satellite signal.”

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The WSJ (subscription required) has gathered that Microsoft and AOL are close to reaching an agreement on an online advertising service designed to compete with Google. Under the agreement, AOL would use Microsoft’s MSN service and drop Google as its provider of Internet search.

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The Wall Street Journal (subscription required) reports that Google is aggressively hiring at least partly due to an ensuing battle against Microsoft, as Microsoft has more than threatened to move into Google’s coveted online advertising with the release of new online subscription-based software. Google Chief Financial Officer George Reyes says, “Our objective is to get to substantial scale as quickly as possible.” He continues by adding, “The view of the management team, supported by the board, was there was at least one very large competitor that could inflict a lot of damage on us, and why not take the money when it was available to buffer any storm that might come downstream for us.”

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