Are AOL’s days of hardship over? During the NY company’s recent earnings announcement, it was reported that its total revenue fell 6% to $532 million in the third quarter, but it was the lowest percentage decline in five years, according to Crain’s New York Business. The company’s advertising revenue, on which its future is depends, grew to nearly $318 million, an 8% increase over the same period last year. The company ‘s recorded loss of 2 cents per share beat analysis, Crains estimates.
AOL has suffered from severe losses in the past years, but its expanding ad business was cheerfully welcomed by Wall Street, which had CEO Tim Armstrong telling Crain’s that AOL is, ” heading toward an inflection point of revenue growth, which will then be followed by profit growth.”
However, AOL’s owned-and-operated properties, which AOL sells for premium ad rates to brands, aren’t seeing much prosperity. Unique visitors to the AOL homepage and brands like TechCrunch and The Huffington Post, and its 35 million monthly users, grew a mere 1%, despite being acquired in the past year.
AOL’s prominence in the display world remains uncertain, with the ever expanding competitors Facebook and Google. By the end of 2011, the company is expected to only own 4.2% display market share in the U.S., according to eMarketer. In 2007, AOL held 10.6% share, Crain’s indicates. With depreciating subscription revenues and the erosion of dial-up business, future advertising gains are vital to AOL’s future.