May 28 (Bloomberg) -- AOL, eight years after the Internet service linked up with Time Warner Inc. in a $124 billion merger, is now worth half as much as Facebook Inc. and less than 5 percent of Google Inc.

Facebook, the biggest social-networking Web site, is valued at $10 billion, its implied value after Digital Sky Technologies agreed to pay $200 million for a 1.96 percent stake this week. Google, operator of the largest Internet search engine, has a market value of $129.7 billion. AOL may fetch about $6 billion following its spinoff from Time Warner, according to analysts.

AOL, a pioneer in allowing consumers to access the Internet over phone lines, has been usurped by upstarts. Facebook was founded five years ago by Mark Zuckerberg, who was born two years after AOL began in 1983. Google, created a decade ago by Stanford University classmates Sergey Brin and Larry Page, is now the second-largest U.S. company by market value that’s not in the Dow Jones Industrial Average.

“It’s gone from the only game in town to an also-ran,” Andy Baker, an equity strategist at Jefferies Group Inc. in New York, said of AOL. When it bought Time Warner in 2001, “they were a giant dialup Internet provider with huge, growing revenue.”

Google, based in Mountain View, California, owns 5 percent of AOL. Google values the stake at $274 million, implying all of AOL is worth $5.5 billion, Michael Morris, an analyst at UBS, wrote in a report today.

He added that AOL may be worth as much as $6 billion, given how much investors are paying for Yahoo! Inc., United Online Inc. and ValueClick Inc. shares relative to their profits.

David Joyce, an analyst with Miller Tabak & Co., figures AOL will fetch $6.3 billion, according to a report yesterday.

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.

Last Updated: May 28, 2009 15:53 EDT