AOL's pulse slows as Q2 revs slip 24%
Ad biz just ain't wot it used to be
AOL saw revenue sharply decline 24 per cent to $804m for the three months ended 30 June this year, compared with $1.06bn in its 2008 Q2.
The ailing company, which is expected to be cut loose from Time Warner later this year, saw operating income fall 28 per cent to $165m for the quarter.
According to Time Warner’s breakdown of AOL’s latest numbers, the firm saw subscription sales tumble 27 per cent, after 510,000 dial-up customers abandoned its service in Q2. AOL currently has 5.8 million subscribers on its books.
And while Yahoo! is busy making hay with Microsoft in an ad deal that will leave the Carol Bartz-led web outfit looking a bit like a glorified door-to-door salesman, AOL continues to limp along, noting a 21 per cent dip in its own ad biz.
It blamed much of the fall in sales on lower ad network, display and paid search revenue.
Time Warner, which earlier this week took a few steps closer to divorcing AOL, reported second quarter net income of $519m, or 43 cents a share, on revenue of $6.8bn. That’s an 8.8 per cent decline compared to the company’s year ago Q2.
"We’re on track to spin off AOL to our stockholders around the end of the year," said Time Warner's CEO Jeff Bewkes. "Separating AOL will benefit both companies - enabling Time Warner to concentrate fully on our core content businesses and improving AOL’s operational and strategic flexibility." ®
AOL UK is different
AOL UK is very different to the US situation. Carphone Warehouse owns the Internet access business (so it's really TalkTalk in that regard) but it must offer AOL content as a condition of sale. But that must be time limited.
Typical friend on aol query.
Friend: I am having trouble with my broadband
Me: Oh, okay, who is your ISP?
Me: That's your problem, change ISP's.
The old large company problem
It seems to hit all companies that grow, eventually they loose site of their key stakeholders, in aol's case they seem to have forgotten that its the paying customers and not the advertisers.
I quite liked aol in the old days and would probably still be with them if their customer service levels had been maintained.
I suspect that it is too late for them now