AOL (owner of TechCrunch) has just reported earnings for Q4 2012 of $599.5 million on earnings of 41 cents per share. That matches analysts expectations on EPS but beats on revenues of $573.1 million. The figures show that after years of decline, the company continues to get back on track with revenue growth.
Within that, advertising — the largest portion of AOL’s revenue — grew by 13% to $410.6 million. Within that, display, at $169.8 million, was essentially flat on a year ago, while search ads — which it offers in partnership with Google — were up by 17% to $103.6 million. Ad revenues from third-party networks — AOL works with sites like parenting.com to provide advertising alongside their content — brought in revenues of $137.2 million — a rise of 31%.
As a point of comparison, last quarter AOL reported flat revenues of $531.7 million, although that in itself was an achievement, since it was the first time in seven years that AOL had not reported a sales decline. Earnings per share in Q3 were 22 cents. With those results beating expectations, AOL’s stock jumped by some 22% after the news, although it did drop back down and before the market opened today were trading at $31.41.
In Q4 a year ago, AOL reported revenues of $577 million, on an EPS of 23 cents per share.
AOL, which first started life in the 1980s providing early online interactivity for Atari and Commodore consoles, pivoted in 1988 into a business as one of the first big Internet service providers, and saw growth skyrocket. Fast forward more than two decades past a merger/demerger with Time Warner and another pivot, AOL has spent years refocusing itself as an online media company, running advertising across its own network of online properties as well as those of third parties. Still, it continues to make a good portion of its revenues from its old dial-up business, although that continues to shrink.
So, to show that it continues to focus itself as a media content business built around advertising, AOL has been trimming, rebranding and growing assets. This week, in the lead up to today’s earnings. Two businesses that did not fit into its bigger strategic idea are now gone: About.me was spun out as a separate business and Hipster.com was closed down. Advertising.com — which includes the Advertising.com display ad network that runs across AOL properties, AOL On video network, the goviral content distributor, the Adtech management platform and Pictela for content-based advertising – was renamed AOL Networks. And it is buying Gdgt, a tech blog started by two of the people who used to run Engadget (another AOL property).