AOL has blamed falling advertising sales in Europe for an 8% year-on-year decline in ad revenues in Q409, the ISPs first financial quarter as an independent company.
The lower ad sales in the UK, France, and Germany resulted in the firm making $471.6 million (€339.8m) from display sales in Q409, compared to $512.5 million in Q408, when AOL was still owned by Time Warner. However the ISP overturned a net loss of $1.96 billion in Q408, by turning a profit of $1.4 million in Q409.
However, subscribers are leaving in droves. Subscription revenues were down 28% year-on-year to $307.4 million in Q409, as the number of domestic subscribers fell from 6.87 million in Q408, to 4.9 million in Q409.
Tim Armstrong, AOL’s chairman and CEO, notes the firm is still in a transition phase and that the Q4 results show what needs to be done to turn the company around. “2009 marked the closing of an important chapter in AOL’s history.”
A restructuring program is in place, which the firm predicts could cut operating expenses by $150 million during 2010, though that figure excludes traffic acquisition costs, which were up 12% year-on-year in Q4.