AOL shows signs of revival on advertising growth

Feb 08, 2013
A sign in front of the AOL Inc. offices on February 7, 2011 in Palo Alto, California. AOL is showing signs of revival with gains in advertising, a key toward the reinvention of the former Internet star as a media firm.

AOL is showing signs of revival with gains in advertising, a key step toward the reinvention of the former Internet star as a media firm.

AOL said Friday profits in the fourth quarter jumped 57 percent from a year earlier to $35.7 million, led by a rise in ad revenues.

Total revenues were up four percent from a year earlier to $599.5 million, in what the company said was the first time revenue had increased year-over-year in eight years.

The growth was led by advertising, which saw a 13 percent jump in revenue.

"AOL returned to growth and generated significant value for shareholders in 2012," Tim Armstrong,the firm's chairman and chief executive, said in a statement.

"AOL has strong momentum entering 2013 and is positioned to continue on our growth path by executing our strategy to build the next generation media and technology company."

AOL, formerly known as America Online, has been struggling since the collapse of its leadership as an Internet subscription service, and has been seeking to become a more diversified Web firm.

It fused with news and entertainment giant Time Warner in 2001 at the height of the dotcom boom in what is considered one of the most disastrous mergers ever.

It was spun off by Time Warner in December 2009 into an independent company and has been struggling since then as it tries to focus on media and news.

Its operations include the Huffington Post news site, technology news site TechCrunch, the local news operation Patch, Moviefone and Games.com.

AOL shares leapt 7.3 percent to close at $33.72.

Victor Anthony at Topeka Capital Markers said the shares may "react positively off the headline revenue outperformance" and profit growth, but added that "we would have liked to see growth in domestic display (advertising) as evidence that AOL can fully compete with Google and Facebook."

Anthony added that a spinoff of the struggling Internet access arm called AOL Networks "would be a catalyst."

Youssef Squali at Cantor Fitzgerald was cautious, maintaining a "hold" rating on AOL.

He said the better-than-expected gains show that AOL is "slowly moving back to growth mode again" but added that "management shied away from providing revenue guidance or quantifying margin improvement potential for 2013."

Explore further: Oregon sues Oracle over failed health care website

add to favorites email to friend print save as pdf

Related Stories

AOL rallies on results surprise

Nov 06, 2012

AOL said Tuesday it made a profit of $20.8 million in the third quarter as the struggling Internet firm stemmed a seven-year decline in revenues.

AOL posts profit in 'milestone' quarter

Jul 25, 2012

AOL on Wednesday posted a profit for the second quarter of $970.8 million, boosted by a big sale of patents, while citing signs of progress in turning around the struggling Internet firm.

AOL launches $400 mn share buyback

Jun 28, 2012

AOL on Thursday launched a $400 million stock buyback in the latest move aimed at improving shareholder value at the Internet and media group.

AOL unveils buyback, special dividend

Aug 27, 2012

AOL said Monday it was launching a share buyback worth some $600 million and paying a special dividend as part of its plan to distribute proceeds from a billion-dollar patent sale.

AOL cutting over 900 jobs in US, India

Mar 10, 2011

Internet company AOL is cutting more than 900 jobs as it joins forces with The Huffington Post and seeks to reinvent itself as a major player in online news.

Recommended for you

Oregon sues Oracle over failed health care website

4 hours ago

Oregon Attorney General Ellen Rosenblum says she's filed a lawsuit against Oracle Corp. and several of its executives over the technology company's role in the state's troubled health insurance exchange.

Google buys product design firm Gecko

5 hours ago

Google on Friday confirmed that it bought Gecko Design to bolster its lab devoted to technology-advancing projects such as self-driving cars and Internet-linked Glass eyewear.

Ticketfly buying WillCall for on-premise data

Aug 21, 2014

Ticketfly Inc., a San Francisco-based technology company among several posing a challenge to Ticketmaster, is acquiring WillCall Inc., a crosstown rival that turns your smartphone into a mobile wallet at live events.

HP revenue inches up after years of decline

Aug 20, 2014

Hewlett-Packard on Wednesday reported that its quarterly revenue rose for the first time in three years, nudged by improved computer sales everywhere except Russia and China.

Restaurants experimenting with pay-in-advance tickets

Aug 20, 2014

With restaurant patrons increasingly jumping on the Internet to make reservations, some high-end eateries here and across the country are adding a new tech wrinkle: having their clientele pay for their meal in advance using ...

User comments : 0