Huffington Post lifts AOL ad revenue

Struggling tech giant says acquisitions have helped create growth, but pre-tax losses hit $11.2m in first quarter AOL’s display advertising revenue grew for the first time in more than three years in the first three months of 2011, helped by the acquisitions of Huffington Post, TechCrunch and GoViral. However, AOL reported a pre-tax loss of $11.2m for the quarter, down from a $78m profit in the equivalent period last year, as the business continues to restructure. Total revenues fell 17% to $551m – a better figure than analysts had expected – as the company’s US dial-up internet subscription business continued to wither with revenues down 24% to $215m. Tim Armstrong, the AOL chief executive, preferred to focus on the 4% year-on-year increase in total display advertising revenues to $130.5m – the first growth since the final quarter of 2007 – citing it as an “important milestone” in the turnaround of the beleaguered company. AOL said US display revenue grew 11% to $122m – the first time it has grown since the fourth quarter of 2009. Just over $5m of the $12.2m year-on-year growth in first-quarter domestic revenue was “primarily” due to the acquisition of Huffington Post and TechCrunch – bought for $315m and $25m respectively . US growth was 6% excluding acquisitions. Armstrong said the Huffington Post, which was acquired in January, was the fastest integration project he had ever worked on and that the business had experienced a growth rate of about 30% in the first quarter. The company said Huffington Post “exceeded budgeted revenue” in the first quarter. However, international display advertising revenues fell 46% year on year to $8.5m, while advertising through AOL’s third-party network fell 19% to $87.4m. Total advertising revenues fell 11% to $313m, some $40m down year on year. The company said the performance from ongoing businesses was “essentially flat” year on year, taking into account the $41.8m in ad revenue lost from the closure of some of AOL’s European operations and the disposal of assets including Bebo and ICQ. AOL added that profitability was affected by $9m in deal-related expenses, primarily for the acquisitions of the Huffington Post and GoViral – which it acquired for $69m in January – and $8.4m in “incentive compensation expenses” tied to buy-ups made in 2010 and in the first quarter of 2011. The company also took a $27.8m hit in restructuring expenses related to the Huffington Post acquisition and the “reassessment of our operations in India”. •

Posted by on May 4, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.