Net profits plunge 86%, ad revenues slide in changing market
While other media companies are reaping the benefits of the economic recovery, AOL continues to struggle, reporting Wednesday lower revenues and profits for the first quarter. CEO Tim Armstrong put a positive spin on the numbers, saying the company posted its first gains in display advertising revenue since the last quarter of 2007.”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,” said Armstrong. Revenues were off 17% to $551 million, while net profits sank 86% to $4.7 million. Profits were hurt by expenses related to its acquisition of The Huffington Post in early March and a reassessment of properties in India. Global display ad revs grew 4%.However, total ad revenue at the company was down 11% to $314 million, largely on big drops in search and contextual advertising. AOL’s subscribers, those who still pay for Internet access although AOL is free, fell 22% in the quarter to 3.6 million.