Saturday October 20, 2018

AOL Talks Yahoo, While UBS Analysts Predict Company’sTurnaround

Image representing AOL as depicted in CrunchBase

Image via CrunchBase

UBS analysts Brian Pitz and Brian Fitzgerald have predicted AOL will raise $532 million in revenue, $7 million more than expected, in its upcoming third quarter results. While its last quarterly earnings report fared badly for AOL, the company has been making some changes towards a turnaround.

For Patch, AOL’s network of 850 hyperlocal news sites, the analysts believe investments will heighten this quarter, though its too early to tell the prospects of monetization. AOL has scaled back expectations for Patch by leaving its ambitions of increasing the network to 1,000 towns by the end of the year.

Meanwhile, it has been reported that AOL CEO Tim Armstrong has been meeting recently with key company shareholders to drum up interst in a potential sale to Yahoo.   According to Reuters, Armstrong is pushing a sale because he believes there can be up to $1.5 billion in savings from “overlapping data centers and duplicate news sites, such as sports, entertainment and finance.”

According to a top shareholder who spoke with Reuters, “The focus in the meeting has gone from a year ago of being around the fundamentals to now being how could you carve this up, what are separate assets worth, are there ways to sell off the business to extract value from them.”