AOL, in its first quarterly report since separating from Time Warner, reported a profit of $1.4 million. The company reported a $1.9 billion loss in the year-ago quarter.
Revenue was down 17% compared with the year-ago quarter but was better than some analysts expected.
As expected but still troublesome, the number of paying dial-up subscribers declined. The company’s revenue from its other online business still doesn’t exceed its lost revenue from subscriptions.
School is still out as to whether CEO Tim Armstrong — recently hired from Google — can build AOL into a successful online service for content and services. The Time Warner venture and the company’s lack of a broadband strategy cost AOL (now calling itself "Aol.") a lot of time and money.
|
Number of AOL employees
|
| When It "Acquired" Time Warner |
15,000 |
| Now |
5,000 |
After a decline of 27% during 2009, AOL is down to less than 5 million dial-up subscribers. The decline also hurts AOL’s advertising revenues because dial-up subscribers tend to do more searches than non-subscribers.
Broadband service providers should be asking why they haven’t signed up more of the remaining 5 million AOL subscribers. Are they located in areas that broadband doesn’t reach? Have their marketing messages missed the mark? Do they offer an entry-level price that can attract subscribers?
AOL had about 15,000 employees when it "bought" Time Warner. After upcoming cuts including some in its international operations, it’ll be down to less than 5,000.
AOL this week said Armstrong turned down a $1.5 million bonus that he was due.
Having taken the money and run, where are Gerry Levin and Steve Case, the two who masterminded the convergence of Time Warner and AOL? Some call it the most disastrous merger ever made. |
