Back to black: AOL struggles into profit
Published 04/02/2010 | 11:27
AOL's maiden results as a newly independent company showed the group had swung from a $1.9bn loss in the last quarter of 2008 to a profit of $1.4m a year later, but was still haemorrhaging subscibers.
Revenues at the dial-up internet group slid from 17pc to $809.7m year on year, after a fall in advertising and subscribers.
Its chairman and chief executive Tim Armstrong said the company had made "significant progress in support of the long-term vision we see in the future of AOL, but today's results continue to reflect the need for our focus and execution on the work required in the turnaround of the company".
Between last October and December the number of domestic subscribers plunged 27pc to 4.9 million, while advertising revenues fell 8pc to $471.6m. The group added that ad revenues were further hit in its international display markets with weakness in the UK, Germany and France.
The profits were favourable in comparison with the end of 2008 because the company had taken a $2.2bn non-cash goodwill impairment charge during the quarter in 2008.
AOL, which is behind Google, Microsoft and Yahoo! in the search market, is slashing costs in a plan to cut $150m out of the business this year. This is part of the strategy to refocus the business on content.
It kicked off a redundancy programme in the US last month, and is cutting back on its international business.
It plans to shut offices in Finland, Germany, Spain and Sweden, and is holding talks over the future of its French operations.