14 DAY TRIAL // AOL has posted its Q1 financial results and they're not looking great. That's not much of a surprise, AOL has been losing revenue and profits for years now and, in that light, the numbers are not that bad, they're above Wall Street expectations, in fact.
AOL revenue for Q1 was $551.4 million, down from $664.3 million in the same quarter in 2010. Both subscription revenue and advertising revenue were down.
Subscription revenue, from its dying dial-up business, was down 24 percent, dropping from $282.7 million to $215.4 million. That slide is expected to continue until this revenue will dry out completely.
Worse is that advertising revenue, which is what AOL is banking on, is dropping as well, it went from $354 million to $313 million in Q1 2011, an 11 percent dip.
This is due to several factors, the sale of Bebo and ICQ both contributed to lower revenue for example. Excluding these factors, revenue is essentially flat.
But there is some good news though, display ad revenue was actually on the rise in the first quarter, something CEO Tim Armstrong has been wanting to do for the past two years, since he took over.
In fact, it was the first time display revenue grew quarter over quarter since Q4 2007. Global display ad revenue grew by 4 percent year over year. It grew by 11 percent in the US, 6 percent if excluding acquisitions.
"Today represents an important milestone in the turnaround of AOL as global display revenue grew for the first time since Q4 2007," Tim Armstrong, Chairman and CEO, of AOL said.
"I am proud of the work completed thus far and we remain focused on accelerating our momentum through continued execution of our strategy to become the premier digital content company," he added.