AOL subscribers go AWOL

2.3m disappear in a year

By Tim Richardson • Get more from this author

Posted in Financial News, 5th May 2005 11:04 GMT

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AOL continues to bleed subscribers, the internet arm of giant media outfit Time Warner confirmed yesterday.

It shed 2.3m customers in the year to the end of March taking its total subscriber base to 21.7m. Or to put it another way, it lost 549,000 punters in the first three months of the year.

In Europe, the ISP added an extra 18,000 subscribers in Q1 taking the number of net users to 6.3m. Overall, though, AOL Europe still managed to lose 69,000 customers compared to the same quarter last year.

The ongoing slide in numbers hit subscription revenues leading to a fall of eight per cent ($145m) to $1.77bn for the three months to the end of March. Although advertising revenues were up 45 per cent ($97m) to $311m, overall revenues for Q1 were down 3 per cent ($58m) to $2.1bn from $2.19bn.

Operating income rose 17 per cent ($47m) to $324m.

Of course, AOL isn't just twiddling its fingers hoping for the tide to turn: the company last month made its much anticipated jump into the internet telephony business.

At the same time, it has also moved to cut overheads. In December, AOL chopped 750 workers from its HQ in Northern Virginia, three weeks after announcing plans to split the business into four divisions. Axing four per cent of the workforce also cuts costs as the ISP giant battles to cope with falling customer numbers. ®