AOL continued to lose subscribers and advertising growth slowed, signaling trouble for the online media company's recent shift in strategy.
Dulles-based AOL posted its weakest quarter of advertising growth since announcing a year ago that it would try to drive traffic to its ad-supported Web sites by giving away AOL.com e-mail accounts, software and other features once reserved for paying customers.
AOL, Time Warner's online division, had $522 million in ad revenues in the quarter ended June 30, a 16 percent increase from $449 million in the corresponding quarter a year earlier. By contrast, ad revenues grew 40 percent or more in each of the previous four quarters.
Ad growth remained too meager to fully offset declines in subscription revenue, which continued to plummet, as expected, after last August's strategy shift. AOL had 10.9 million U.S. subscribers paying for Internet access as of June 30, a 59 percent drop from its peak of 26.7 million in September 2002.
Overall revenue at AOL dropped 38 percent, to $1.3 billion. AOL accounts for 11 percent of Time Warner's revenue, about half of the 20 percent it had contributed until last June.
Source: WashingtonPost
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