Quarterly Report

AOL Revenue Grows On Strong Ad Sales

The Internet giant today reported that revenue during the fourth quarter rose 4%, the company's first quarterly revenue increase in eight years. Growth was driven primarily by strong search and third-party network ad revenue. Hyperlocal network Patch disappointed, falling short of the company's 2012 revenue goal.

AOL today reported quarterly revenue growth for the first time in eight years.

Revenue, keyed primarily by strong search and third-party network ad sales, rose 4% during the fourth quarter of 2012 to $599.5 million, compared with $576.8 million from the same period a year ago. For the year, ad revenue rose 8% to $1.4 billion from $1.3 billion in 2011.

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Search revenue for the quarter was up 17% to $103.6 million and up 4% for the year to 371.5 million. Third-party network ad revenue grew 31% to $137.2 million during the quarter and was up 23% on the year.

Display advertising remained flat for the quarter and the year, bringing in $169.8 million and $575.4 million respectively.

Subscription revenue fell 10% during the quarter to $174.2 million from 194.6 million in fourth quarter 2011. For the year, subscription revenue hit $705.3 million, off 12% from 2011’s $803.2 million.

The company’s net income grew to $35.7 million in the fourth quarter, 57% ahead of the same quarter a year ago.

Brand Connections

Revenue for the brand group — which includes hyperlocal network Patch, Huffington Post and tech news site TechCrunch — rose to $213.2 million for the quarter, up 4% from the fourth quarter of 2011.

In a Friday morning earnings call, company CEO Tim Armstrong said that Patch fell short of its revenue target for the year, according to Forbes’ Jeff Bercovici. The hyperlocal network brought in $34 million in 2012, well under the expected $40 million to $50 million, Bercovici wrote.

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