AOL's ad revenue growth was the bright spot in Time Warner's surprisingly good results, as the US Internet company looks to change its business model.AOL's ad revenue grew by 35 per cent during the first quarter of 2007, as Time Warner's publishing and film businesses failed to catch up and registered a loss of profits.
Still, AOL positive performance surprised many analysts as media titan Time Warner managed to post better results than expected.
Operating income at the internet company grew by 27 per cent to $542 million, as the company capitalised on ad revenue from its popular free email service.
Over 40 per cent of the ad revenue during the quarter was from email advertising, showing itself to be the core business going forward, as visits to AOL's main page remained stable from the end of last year.
But the company's overall revenue dropped below 20 per cent as it has altered its business model from that of paying customers to one driven by advertising revenue.
AOL recently announced a new partnership with Google, aimed at increasing the impact of online advertising.
The new collaboration, dubbed AOL Search Marketplace (SM), allows advertisers to locate their target audience more easily.
SM assesses the terms entered into the AOL search engine by each web user and then places appropriate commercial content on the website that person visits.
Mike Kelly, president of AOL Media, explained that "our advertising clients have told us they want the ability to target their search advertising."
SM, said Mr Kelly, ensures that that advertising is only seen by the individuals most likely to buy the product or service being offered.
