29 April 2010 | Author: D. Warburton Search Copywriter
Web veteran AOL has got off to a shaky start in 2010, with the news that the internet pioneer's sales dropped by 23 per cent in the first quarter. Bosses are blaming the performance on layoffs and restructuring, and are still convinced of AOL's potential to become a growth company.
Since being sold by Time Warner last December after eight years of falling subscribers, AOL has looked to rebrand as a content provider, in a similar vein to Yahoo!. Despite the news that sales fell to $664 million (£435 million) in the last quarter, with ad revenues down 19 per cent to $354.3m (£232m) and subscriptions down by another 28 per cent to $282.7 million (£185.2m), CEO Tim Armstrong stated that AOL is still buoyant about the road ahead.
"AOL continues to make progress against our long-term objective of becoming an internet growth company," Armstrong explained.
"Our results highlight the accomplishment of our first goal in AOL's turnaround which was to significantly reduce AOL's cost structure.
"While our restructuring had an impact on Q1 advertising results, we are encouraged by the advertising market's recent strength. We are now entering the second phase of AOL's plan which is to greatly improve the consumer experience, scale the advertising systems and teams, and aggressively pursue our strategy in the marketplace."
The Register reports that part of this 'restructuring' has involved layoffs at AOL's UK offices, as well as the 'winding-down' of operations in France and Germany, which the company says accounted for $5.8m (£3.8m) in lost revenue for Q1.
The company also cited "continued declines from Bebo" as partly responsible for its losses, and reiterated its intention to either sell or close down the site later this year if it continues to lose the interest of social networkers.
AOL reports further losses
Web veteran AOL has got off to a shaky start in 2010, with the news that the internet pioneer's sales dropped by 23 per cent in the first quarter. Bosses are blaming the performance on layoffs and restructuring, and are still convinced of AOL's potential to become a growth company.Since being sold by Time Warner last December after eight years of falling subscribers, AOL has looked to rebrand as a content provider, in a similar vein to Yahoo!. Despite the news that sales fell to $664 million (£435 million) in the last quarter, with ad revenues down 19 per cent to $354.3m (£232m) and subscriptions down by another 28 per cent to $282.7 million (£185.2m), CEO Tim Armstrong stated that AOL is still buoyant about the road ahead.
"AOL continues to make progress against our long-term objective of becoming an internet growth company," Armstrong explained.
"Our results highlight the accomplishment of our first goal in AOL's turnaround which was to significantly reduce AOL's cost structure.
"While our restructuring had an impact on Q1 advertising results, we are encouraged by the advertising market's recent strength. We are now entering the second phase of AOL's plan which is to greatly improve the consumer experience, scale the advertising systems and teams, and aggressively pursue our strategy in the marketplace."
The Register reports that part of this 'restructuring' has involved layoffs at AOL's UK offices, as well as the 'winding-down' of operations in France and Germany, which the company says accounted for $5.8m (£3.8m) in lost revenue for Q1.
The company also cited "continued declines from Bebo" as partly responsible for its losses, and reiterated its intention to either sell or close down the site later this year if it continues to lose the interest of social networkers.
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