AOL’s Q3 Ad Revenue Rises

AOL Inc. (NYSE:  AOL), a global web services company, today released its third-quarter financial results. The company’s advertising revenue rose in the third quarter of 2011, pushing shares sharply higher in early trading.

At last check, AOL shares were trading 10.19% higher at $14.71.

AOL’s total revenue fell 6% to $531.7 million. However, the decline was not as severe as analysts had forecasted. Analysts were expecting the company to report revenue of $524 million. The lower than expected decline in total revenue was mainly due to an increase in the company’s advertising revenue.

New York City-based AOL reported total advertising revenue of $317.7 million, representing an increase of 8% over the same period in the previous year. The year-over-over increase in advertising revenue was driven by the strength of AOL’s Ad.com network and international display advertising.

AOL’s overall display advertising jumped 15% on a year-over-year basis. However, the company’s share of display advertising has fallen due to increasing competition from the likes of Yahoo (NASDAQ: YHOO), Google (NASDAQ: GOOG) and Facebook. According to market research firm eMarketer, AOL’s share in display advertising is expected to fall to 4.2% in 2011, down from a share of 10.6% in 2007.

AOL is also losing subscribers to its access business. The company’s subscription dropped 22% to $192 million in the third quarter of 2011.

AOL posted a loss of $2.6 million, or $0.02 per share for the third quarter, compared with analysts’ estimate of a loss of $0.06 per share. For the same period in the previous year, the company had reported a profit of $171.6 million, or $1.61 per share.

Tim Armstrong, Chairman and CEO of AOL, said that the company continues to build strong consumer experiences as it executes its strategy to build the premium branded media company for the internet.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.