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February 08, 2013

AOL Posts First Revenue Increase in Eight Years for Q4 2012

By Rory Lidstone, TMCnet Contributing Writer

It seems that the fourth quarter of 2012 proved to be a positive one for a number of companies, and with the release of AOL's (News - Alert) financial performance for this period, it would seem this past holiday season proved especially noteworthy for the company.

Indeed, AOL managed its first revenue growth in eight years during the quarter.

The company took in revenue of $599 million during Q4 – up 4 percent from $576 million in the fourth quarter of 2011, while beating out analyst predictions of only $573 million. Apparently, this strong performance has largely to do with a boost in sales from AOL's global advertising, which grew by 13 percent year over year.

Subscription sales, meanwhile, were down 10 percent with an average monthly churn rate sat around 1.8 percent. Still, though, compared to an 18-percent decline in subscription sales and a 2.2-percent monthly churn rate in Q4 2011, these numbers are relatively positive.

As for full year revenue, it declined slightly to $2.19 billion compared to $2.2 billion in 2011, but the company remained positive and expects to see 2013 revenue growth.

"AOL returned to growth and generated significant value for shareholders in 2012," said AOL CEO Tim Armstrong in a statement. "AOL has strong momentum entering 2013 and is positioned to continue on our growth path by executing our strategy to build the next generation media and technology company."

Meanwhile, Yahoo also had an exceptional fourth quarter, posting its first revenue gain since 2008, which was largely attributed to the company's international investments as well as the efforts of new CEO Marissa Mayer.

In November, amid mobile restructuring, AOL senior vice president David Temkin resigned, leaving the company before 2013 started. Temkin's resignation marked the third consumer technology head to leave in 2012, which many speculated had to do with focusing more on media and less on technology.

Edited by Braden Becker
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