AOL Subscribers Drop Even As Advertising Revenues Rise 26 Percent

Share this article:

AOL's first quarter 2006 earnings were impacted by a loss of more subscribers than analysts expected, even as parent company Time Warner Inc. reported a slight rise in earnings yesterday.

AOL revenues dropped 7 percent to $2 billion in the quarter because of a 13 percent drop in subscription revenues. Time Warner revenues rose 1 percent to $10.5 billion.

AOL lost 835,000 U.S. subscribers and 147,000 subscribers in Europe from the fourth quarter of 2005 to the first quarter 2006. The sharp drop in subscribers was more than analysts predicted.

Pali Research analyst Richard Greenfield wrote in a research note on the earnings that he had expected AOL to lose about 550,000 subscribers in the quarter.

Still, a 26 percent increase in advertising revenues to $81 million offset the subscriber loss.

Goldman Sachs analyst Anthony Noto expects the advertising growth trend to continue. "We have seen the beginning signs that advertising will at some point return the segment to top line growth," Mr. Noto wrote in a research note on Time Warner's earnings.

Share this article:
You must be a registered member of Direct Marketing News to post a comment.
close

Next Article in Multichannel Marketing

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Multichannel Marketing

Complexity's What Marketers Got, Simplicity's What They Want

Complexity's What Marketers Got, Simplicity's What They Want

Customer insights managers want campaign management tools to remain easy to use, even as they up their games with multi-layered campaigns.

Wine.com Uncorks New Digital Marketing Opportunities

Wine.com Uncorks New Digital Marketing Opportunities

The online wine retailer's strategy incorporates different flavors and depths.

93% of Companies Are Ineffective at Cross-Channel Marketing

93% of Companies Are Ineffective at Cross-Channel Marketing ...

Companies point to a lack of resources as the most common reason for lackluster marketing integration, a study says.