Time Warner issued its Q3 07 earnings release today (PDF here) and AOL still looks like a stinker for the media conglomerate. Despite the tremendous effort that Time Warner made to turn AOL into an Internet ad giant, the online unit continues to barely eke out growth on the ad front.
From Q2 07 to Q3 07, AOL's ad revenues ticked up by only 3%, climbing from $522 million to $540 million. Total page views are on the decline, dropping 9% quarter-over-quarter from 52 billion to 47 billion, although during an earnings call, Jeff Bewkes, soon to take over the reins as CEO of all Time Warner, attributed this drop to a change in measurement methodology and said he expects page views to jump next quarter.
A further, perhaps last-gasp, push to get AOL into the top ranks of online advertising is the company's deal, announced (release) this morning, to buy Internet advertising tech supplier Quigo for a reported $340 million.
Even if Time Warner manages to turn AOL's ad businesses around, the unit continues to lose its margin-rich dial-up customers, resulting in an overall steep decline in revenues generated by AOL. During Q3 07, AOL lost around 1.1 million "subscribers," as the dial-up customers are still called, ending the quarter with around 10.1 million total dial-up subscribers.
Actually, that's still a pretty impressive statistic. Who, exactly, are these 10 million or so people? Are they all older Internet users still not comfortable with the Interweb? Are they folks who don't feel they can afford broadband connectivity, even though most telcos offers low-speed DSL options at prices not much higher than AOL's dial-up service? I find it pretty intriguing that the slope of AOL's dial-up loss hasn't been steeper so far.
In any event, the combination of the tepid ad revenue growth with the declining subscriber growth resulted in a 39% year-over-year drop in total revenues to $1.2 billion.
Cynthia Brumfield at 1:34 PM|Comments(1)
Well, well: dial-up is still alive, if not unwell. The funny thing I don't know anyone still using a dial-up connection. Of course, no one is going to admit they have one these days!
Mark
Posted by: Mark Evans at November 9, 2007 2:30 PM
Blogs We Read
