The developing story of Google and Time Warner's AOL division continues with the announcement that, in addition to Google's newly acquired 5% stake in Google that there will be a new alliance involving video and instant messaging.

Tacitly significant is the absence of MSN from this alliance. Earlier reports indicated that Redmond was also seeking an alliance of some sort with AOL but had been seeking an overly complex agreement in the eyes of AOL management.

In the agreement, Google will let AOl sell graphically-oriented advertising into Google's network, more of AOL will be open to Googlesearches, and searches for video programming are also enabled.

The agreement is being perceived as a negative to Microsoft, but in the spirit of at least one early analyst, major Time Warner investor Carl Icahn sees weakness for AOL in the deal, reportedly labeling it "disastrous" because it apparently precludes future deals with Microsoft (or other major Web players such as eBay and Yahoo).

More turns of the screw are expected during which time investors, users, and analysts will see how many ghosts may haunt the new deal's signees as well as those left on the sidelines for the time being.