In agreements signed in March and December 2001, AOL Time Warner agreed to pay Bertelsmann $6.7 billion in cash, not stock. And as part of the deal, Bertelsmann agreed to buy a total of about $400 million in advertising over the next two years, all of it for its music group and other divisions.

....Now the S.E.C. contends that the $400 million actually reflected a kind of rebate on the $6.7 billion reaped from Mr. Middelhoff's investment in AOL, or more specifically a payment to obtain the guarantee of cash instead of stock, and thus should have been deducted from the sale price instead of added to its advertising revenue. The result, the S.E.C. contends, improperly inflated AOL's profits and revenue and made its growth look more robust. [NY Times] The net result is that all dealing between corporate giants AOL (later AOL Time Warner) and Bertelsmann - for good or ill - were colored by the friendship of two men; and with both men soon out of the picture, the corporations will be left to deal with the ramifications of that relationship without them.