AOL reported that their expected revenue and profit on the strongest advertising growth has been higher than the past seven years. According to Thomson Reuters, third quarter revenue was flat at $531.7 million, ahead of the analysts average estimate of $521.6 million. Advertising revenue rose 7 percent to $340 million, while subscription revenue for AOL’s dial-up services fell 10 percent to $173.5 million. Subscription revenue had its lowest rate of decline in six years.
The trends which are used by AOL are helping it since turnaround hinges on the success of getting more online advertising dollars and reducing its reliance on the lucrative. Andre Sequin, RBC Capital Markets analyst said “Things look great and their company is continuing to make steps in the right direction.
There are troubling signs in the results, Domestic display advertising where AOL is making a big effort including with splashy acquisitions such as the Huffington Post, fell 3 percent in the quarter. That compares with the overall U.S. display and market estimated to grow more than 20 percent to $14.98 billion according to research firm eMarketer.
In third-party revenue, AOL’s advertising revenue was lifted by search revenue and double-digit growth. Display ads are big, pricey units on Web pages favored by brand advertisers. Third-party network consists of AOL’s Ad.com which helps sell ads across other properties. These types of ads are usually lower than display-ad units.
However, the company has taken a number of steps over the year including selling some of its patents to Microsoft for $1 billion and returning those proceeds to shareholders.
Tags: Online advertisement