August 6th, 2008
AOL officially split, but revenue tumbles and ad sales anemic
When you have something like Batman: The Dark Knight to talk about it’s safe to say that Time Warner doesn’t want to yap a whole lot about AOL. There’s a good reason for that: AOL revenue fell 16 percent in the second quarter and advertising revenue for the online unit was anemic, up 2 percent.
On the bright side, Time Warner (statement) did confirm that it is splitting AOL into two separate parts–access and advertising. One unit if not both will be offloaded.
AOL revenue fell 16 percent to $1.1 billion in the second quarter due to a 29 percent decline in subscription revenue. Advertising revenue was up 2 percent in the quarter. Time Warner said AOL’s advertising revenue was helped by paid search and third party ads, but display advertising fell. Operating income fell 36 percent to $230 million. Time Warner appeared to provide less detail about AOL than it has in previous earnings statements.
Overall, Time Warner reported revenue of $11.6 billion in the second quarter, up 5 percent from a year ago. Films and cable fueled the results. The company had earnings per share of 22 cents a share, down from 25 cents a year ago.
Larry Dignan is Editor in Chief of ZDNet and Smart Planet as well as Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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