AOL ad revenue hit by global downturn

AOL is engaged in a strategy of focusing increasingly on advertising sales, following the sale of several of its ISP businesses around the world. Last year, it created the Platform A ad network to offer its Advertising.com, Tacoda, Third Screen Media, Lightningcast and ADTECH operations under one roof.

According to parent company Time Warner's Q2 2008 results, AOL ad revenue increased only by 2% year on year. Time Warner said that AOL's advertising revenue benefited from growth in sales of advertising on third-party websites and paid-search advertising, offset partly by a decline in display advertising on AOL Network sites.

By comparison, AOL ad revenue in Q4 2007 was up 18% from the previous quarter, and in Q3 2007, it was up 13% from the prior quarter. In Q1 2008, as revenue increased only by 1% from the prior quarter.

Overall, in Q2 2008, AOL revenues declined 16% ($196m) to $1.1bn, reflecting a 29% decrease in subscription revenues wrought by its decision to scale down its ISP businesses.

Time Warner confirmed the anticipated split of AOL's ISP and advertising businesses into separate divisions by early 2009.