14 DAY TRIAL // AOL may be planning for a greater restructuring of its businesses but it's not quite there yet and, looking at the financial results for Q2 2009, it's not hard to see why Time Warner has decided to spin off the company. Revenue for the Internet giant dropped 24 percent year over year and dragging Time Warner with it, as the whole company saw a decline of 9 percent in revenue.
“Despite the difficult economy, our Content Group delivered 4% year-over-year Adjusted OIBDA growth in the quarter. We’ve also reaffirmed our business outlook for the full year. Our performance reflects the diversity of our revenue streams, the appeal of our content and our continued focus on efficiency,” Jeff Bewkes, Time Warner chairman and CEO, said “We’re continuing the reshaping of Time Warner that we started last year. We’re on track to spin off AOL to our stockholders around the end of the year. Separating AOL will benefit both companies – enabling Time Warner to concentrate fully on our core content businesses and improving AOL’s operational and strategic flexibility.”
AOL lost 2.3 million subscribers in the last year, taking $135 million in lost revenue with them, a 27 percent drop. Just in the last quarter, AOL's dial-up business lost 510,000 customers but still has 5.8 million subscribers. Advertising revenue also dropped 21 percent adding up to another $111 million. Overall revenue dropped 24 percent to $804 million. Ad revenue was down on AOL properties, using the former Mediaglow platform, which is now being called AOL Media, but also on third-parties using the company's advertising network Platform A.
Plans to split the two companies are going ahead and are expected to finalize sometime this year. Seeing the financial results, it's no mystery why Time Warner wants to get rid of AOL and remove it from the company's balance sheet. Though AOL may have a future ahead of it, the firm still has some way to get there.