AOL Inc said on Thursday it has renewed a search agreement with Google Inc, further cementing a decade-long partnership as AOL tries to turn around its business.

The new five-year deal, effective immediately, includes a revenue share on a per-search basis. Additional financial terms were not disclosed.

For the six months that ended in June, AOL's advertising revenue associated with the Google relationship was $209 million.

The new agreement allows AOL to place its content on YouTube with both camps sharing ad revenue placed against the video.

AOL is also working with Google to create an AOL mobile search product.

AOL and Google's 2006 contract was set to expire in December, setting off months of speculation as to what company, including Microsoft and its Bing search engine, AOL planned to partner with for search.

We took a very specific tact to this deal, said Tim Armstrong, chief executive of AOL and a former executive with Google. He said AOL began serious discussions with a handful of companies in April.

We wanted a better product and better revenue and better distribution of AOL content, he said about ultimately choosing to partner with Google.

AOL was spun off by Time Warner Inc late last year and Armstrong is tasked with setting the 25-year-old Internet company, synonymous with dial-up and you've got mail! on a different course.

Since Armstrong came on board, AOL has been shedding properties, including social networking site Bebo, streamlining its sales force and rebuilding its ad platform to capture more marketing dollars as it emphasizes its content.

AOL shares rose to $23.42 in premarket trading after closing on Wednesday at $22.90.

(Reporting by Jennifer Saba, editing by Maureen Bavdek)

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