In its latest 10Q, Google (GOOG) admits that its $1 billion investment in AOL "may be impaired" (note spotted by sharp-eyed Rafat Ali). This is a polite way of saying that the investment is now worth a lot less than the $1 billion Google paid for it--and that, by extension, AOL is worth a lot less than the $20 billion valuation Google placed on it in 2005 when it bought 5% of the company.

Of course, we knew that already. The highest estimates of AOL's value these days usually top out at around $10 billion ($15 billion if Microsoft goes into a testosterone-fueled bidding-war rage). This would put the value of Google's 5% stake at, say, $500 million to $750 million.

What's most interesting about Google's AOL note, however, is that the company believes the impairment may be temporary (expressed below as not believing the impairment is other than temporary). This is a polite way of saying that Google is dreaming that AOL might actually recoup some of its vaporized value someday:

we believe our investment in AOL may be impaired. After consideration of the duration o