Feeds

AOL suffers from weak ad market

Don't we all

  • alert
  • submit to reddit

The essential guide to IT transformation

America Online - the Internet division of media giant AOL Time Warner - reported a fall in earnings for the first three months of the year after an increase in subscription revenues was cancelled out by tumbling advertising and ecommerce revenues.

EBITDA (earnings before interest etc) fell 15 per cent to $433 million from $507 million in the corresponding period last year.

Revenues for the Internet unit were flat at around $2.3 billion.

While growth in subscriptions increased by 19 per cent advertising and ecommerce revenues fell by 31 per cent in the quarter, highlighting the continuing problems faced by the sector.

Worldwide, AOL attracted 1.4 million new subscribers giving it just under 35 million users.

This includes around 26 million in the US, some 6 million in AOL Europe, and fewer than 3 million throughout the rest of the world.

AOL does not strip out European sales figures; however, it recently revealed, during the $6bn buyback of Bertelsmann's half share in AOL Europe, that the division lost a whopping $600m on annual revenues of $800m. Currently, the company benefits to the tune of £30m through favourable tax treatment in the UK, but this loophole will end next year. AOL Europe reckons it can save $300m a year by renegotiating contracts with telecoms infrastructure suppliers, according to an article last month in the Mail on Sunday.

In a statement CEO-elect Dick Parsons said: "Overall, except for online advertising, the performance of our businesses remains at least as strong as we expected when we provided our earlier outlook, and we anticipate that they will collectively drive growth this year.

"The weakness of the Internet advertising business is still a challenge, however, and we have taken decisive steps to address it."

Bob Pittman, who is now running America Online, said his number one priority is to improve advertising revenues for the business.

Oh, and AOL Time Warner reported $54.2 billion net loss for the quarter - believed to be the biggest ever quarterly loss in US corporate history - due to a one-off accounting charge. ®

Gartner critical capabilities for enterprise endpoint backup

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
prev story

Whitepapers

Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up distributed data
Eliminating the redundant use of bandwidth and storage capacity and application consolidation in the modern data center.
The essential guide to IT transformation
ServiceNow discusses three IT transformations that can help CIOs automate IT services to transform IT and the enterprise
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.