AOL hit by slowdown

Ad revenue only up by 2% on last year

11 August 2008 9:41 GMT / By Katie Scott

It seems AOL is having a hard time of it at the moment.

Google is rueing its investment in the company, whilst rumours are circling that parent company, Time Warner, is splitting AOL in two in order to sell it.

Now the company has admitted it, like so many companies, has been hit by the economic downturn.

AOL's ad revenue has increased by only 2% during Q2 of this year.

According to parent company Time Warner's Q2 2008 results, AOL's advertising revenue did benefit from growth in sales of advertising on third-party websites and paid-search advertising, but was hit by a decline in display advertising on AOL Network sites.

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.

The company is in the midst of a strategy to try and drive ad sales up, which included creating the Platform A ad network to offer its Advertising.com, Tacoda, Third Screen Media, Lightningcast and ADTECH operations under one roof.