There's nothing encouraging about AOL's
The fact that the stock is plunging to a new low on the news today may be scaring potential buyers from digging any deeper than that.
Big mistake.
The $319 million that AOL generated in its global advertising business marks the first time that ad revenue has inched higher in three years.
There are plenty of moving parts behind the turnaround, with enough asterisks to fill the sky with stars. AOL has gone on to acquire The Huffington Post and TechCrunch over the past year, generating incremental ad revenue through a pair of content sites that attract high advertising rates.
However, AOL has also sold off its ICQ messaging platform and Bebo social networking site.
In other words, with so many properties coming and going through AOL's revolving door, it may take some time before we get an accurate idea of how the company is doing.
This is still an important achievement for CEO Tim Armstrong, who may have bitten off more than he could chew when the former Google
We all know that subscription revenue will continue to sink. Premium access accounts peaked at 26.7 million nine years ago, and it's been gradually tanking ever since. We are now down to 3.4 million homes waking up to "Welcome" screens, a 21% slide over the past year.
Every quarter that AOL doesn't sell off its access business to Earthlink
Obviously, this shouldn't take away from AOL's overdue uptick in ad revenue. It's not a complete success on the sponsorship front. International display revenue and search advertising dipped during the quarter. However, Armstrong's content farm strategy of acquiring magnetic sites and emphasizing cost-efficient articles and videos is paying off -- just like it did for Yahoo!
What do you think AOL should do to win back investor confidence? Share your thoughts in the comment box below. Add AOL to My Watchlist to see if it's able to live up to the turnaround.