AOL revenues decreased 23% ($261 million) to $867 million, due to a 27% decline ($146 million) in Subscription revenues and a 20% decrease ($109 million) in Advertising revenues. The decline in Subscription revenues reflects mainly a continuing decrease in subscribers, related primarily to AOL’s strategy to offer its e-mail and certain other products free of charge. Driving the decrease in Advertising revenues were declines in sales of advertising on third-party Internet sites, as well as display advertising and paid-search advertising on AOL Network sites.
Operating Income before Depreciation and Amortization declined 37% ($150 million) to $255 million, resulting primarily from lower revenues, offset partly by lower traffic acquisition costs ($58 million), lower personnel and overhead costs, as well as reduced marketing, network and other expenses. The current and prior year quarters also included net restructuring charges of $58 million and $9 million, respectively.
Operating Income decreased 47% ($134 million) to $150 million, due primarily to lower Operating Income before Depreciation and Amortization, offset in part by lower depreciation expense ($14 million).
Key Operating Metrics
During the quarter, AOL had 106 million average monthly domestic unique visitors and 58 billion domestic page views, according to comScore Media Metrix, which translates into 181 average monthly domestic page views per unique visitor.
As of March 31, 2009, the AOL service had 6.3 million U.S. access subscribers, a decline of 570,000 from the prior quarter and 2.4 million from the year-ago quarter, reflecting subscriber losses due partially to AOL’s strategy to prioritize its advertising business.
And the rest of Time Warner?
Not horrible. Revenue dropped 4%, thanks mainly to a horrific 23% decline in Publishing. But EBITDA was actually up 3% year over year.
Courtesy article appearing in The Business Insider - Silicon Aalley Insider dated April 29, 2009
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