As I wrote in Does AOL print its own money?, AOL has spent years paying for dozens of fraudulent escapades involving falsified advertising revenue and non-existent deals dreamed up between them and dozens of smaller Internet companies during their heyday and sequential dot-bust.
While a running tally I’ve kept on fraud settlements has them paying over $3,995,000,000 to date, you can now tack on an additional $2.8 billion they must cough up to cover themselves and avoid going to trial. As I pointed out in my other post, AOL depleted the “reserve” account that pays these settlements back in March, when they ran into the red in order to cover a $144 million settlement reached with The Ohio Bureau of Workers Compensation and five of their state pension funds:
Let’s go over this again. How much is left in their reserve? That’s right, folks: nothing. How will they pay for up to $2.3 billion in future settlements with no reserve left at all?
While my estimate was very good (I mused that AOL would pay out another $2.3-$3 billion to continue settling suits this year) AOL still refuses to explain how they will pay for these settlements. They must be hitting up Time Warner for loans, since the depleted reserve hasn’t been renewed since March, when they promptly emptied it again. My bet is Time Warner demands separation from AOL by the end of the year, when it will be sold off as an independent property (hopefully to the lowest bidder, someone who turns it back into what it should be…a domain name, nothing more).