AOL ad revenue falls 6%

by Tristan O'Carroll, Media Week 05-Nov-08, 13:30

LONDON - AOL's global ad revenue fell by $33m (£21m), or 6%, year on year in Q3, as the Time Warner company felt the impact of the economic downturn.

Time Warner said that AOL's revenue decreased by 17%, or $207m (£130m), to $1bn (£626m), due to a 26% decline in subscription revenue and the 6% decrease in advertising revenue.

The decline in subscription revenue reflects mainly a decrease in US AOL subscribers, following AOL's decision to offer its e-mail and other products free of charge.

Driving the decrease in ad revenue were declines in display advertising on AOL's own sites and sales of advertising on third-party internet sites, offset partially by an increase in paid-search advertising.

AOL will hope to improve its ad revenue over the rest of the year and into 2009. Earlier this year, it created the Platform-A network to offer its various commercial businesses such as Advertising.com, Tacoda, Third Screen Media, Lightningcast and ADTECH operations under one roof.

AOL is engaged in a strategy of focusing increasingly on advertising sales, following the sale of several of its ISP businesses around the world.