AOL garners $1.4m profit; Revenues drop by 17%
In its first quarterly report as an independent company in ten years, AOL posted a $1.4 million profit to close out 2009. The overall profit comes despite the company’s revenues falling 17 percent to $809.7 million, largely due to declines in advertising sales and dial-up Internet subscribers.
By Mike Hackmer | February 4, 2010
In its first quarterly report as an independent company in ten years, AOL posted a $1.4 million profit to close out 2009. The overall profit comes despite the company’s revenues falling 17 percent to $809.7 million, largely due to declines in advertising sales and dial-up Internet subscribers.
The changing results are not unexpected, as AOL is seeking to emerge from what CEO Tim Armstrong calls a transitional year that has seen the company shed its Time Warner parent, reduce its workforce to become more lean and hone its market strategy around being a "content-focused company."
AOL’s change of course to become more content-focused was illustrated by Armstrong during a recent call with analysts. He spoke of the company’s tech news blog, Engadget, which is dubbed a web magazine with "obsessive daily coverage of everything new in gadgets and consumer electronics". Armstrong said the portal was strong enough with people highly interested in gadgets and consumer electronics that it could attract advertising partners such as Sprint. The site also was the "official" blog of the consumer electronics show.
Overall, AOL is continuing to change – shedding much of its past, while working to embrace what executives like Armstrong consider a viable future. Armstrong said as much during the call, referring to the past year as "getting us back on track."
To that end, analysts and consumers can expect to see AOL continue to reduce its dial-up subscriber base (down 27 percent from last year) and expand its ability to provide unique content (ie, AOL’s recent acquisition of Nashville-based video production firm, StudioNow, for $36.5 million).
Read More News