CYBERSPACE – An official announcement regarding Google’s purchase of a stake in AOL/Time Warner is expected tonight, a deal which is getting mixed reviews from analysts, shareholders and bloggers alike.According to various media reports, Google is to purchase a 5% share in Time Warner’s struggling internet sector for $1 billion, and will be granted minority shareholder rights that will protect its position and allow for easy exit in the future.

Details of the transaction are expected to be announced tonight, after Time Warner’s board meets to give formal approval to the purchase. Time Warner has recently held a series of meetings with various search engine companies as part of an effort to drive traffic to AOL. Time Warner had been leaning towards a deal with Microsoft/MSN, but last week opted to ink a deal with Google instead.

Had AOL gone through with the plan to use MSN, the deal would have created a formidable adversary for Google, creating a third major power in their sector along with Google’s primary rival, Yahoo.

Not everyone is optimistic about the deal, with billionaire investor Carl Icahn – who owns of approximately 3% of Time Warner through one of his investment groups – being among the most vocal critics of the impending transaction. Icahn has said that the move could prove “disastrous” for Time Warner.

“’The real risk for Time Warner shareholders is that a Google joint venture may be short sighted in nature and may preclude any consideration of a broader set of alternatives,” Icahn wrote in a letter sent to Time Warner directors.

Icahn added that he’s “deeply concerned” that Time Warner “may be on the verge of making a disastrous decision” that will prevent the company from maximizing its value, and reduce the potential for eventually selling AOL in its entirety, to a list of potential suitors that could include Microsoft.

Icahn is not alone in his concerns over the deal, which some analysts say could be bad for Google’s image and brand trust. Anthony Noto, analyst for Goldman Sachs, cautioned that there could be a “backlash for Google if it gives special treatment to AOL to help it improve its search placement and allow it to be the only branded advertiser on its site”. Noto said that negative publicity regarding AOL’s heavy presence on Google could lead Google’s customers to employ a different search engine, should they come to the conclusion that Google’s results were no longer as objective.

In an interview with the New York Times, John Battelle author of The Search: How Google and its Rivals Rewrote the Rules of Business and Transformed Our Culture, said that the deal with AOL could serve to undermine Google’s image as a completely customer-focused company.

“This is Google’s first test as a chess player in a major corporate battle,” Battelle said. “They are saying, ‘We will take some of our pawns and block the move to our queen by Microsoft.’ Until now, Google has said, ‘We don’t think about our competitors. We spend all our time building better products for our users.’”

That shift in strategy, Battelle warns, could rub Google users wrong, and lead to a public relations problem for the search giant. “What they are giving away is the perception in the market place that Google isn’t for sale,” Battelle told the Times.