AdapTV another arrow in AOL, Inc (NYSE:AOL) quiver

Posted by Steve Raasch August 8, 2013 0 Comment 766 views

On Wednesday, AOL, Inc (NYSE:AOL) reported its quarterly earnings. The company topped analyst estimates. In addition, it has announced the AdapTV acquisition. AOL is making a concerted effort to draw out every weapon it can to beat the online ad business competition it faces from Google and Yahoo.

The Q2 results

In the Q2, AOL’s Q2 EPS was 35 cents/share which topped analyst projections by 2 cents. There was a 2% rise in revenue from the same quarter in 2012. Its earnings growth was almost on par with what it stood at in the last quarter. The company had posted a hearty result for its publishing properties and ad network unit. However, its core dial-up subscription business brought in losses.

AOL, Inc (NYSE:AOL)’ has now set out on the track to profitability but its “brand group” reported a $1.4B loss in comparison to the $15.2B loss that it incurred in the same quarter of last year. Most of this loss came from “Patch”, its much-touted but failed attempt at creating a national network of all news sites.

The acquisition game

AOL has acquired AdapTV for $405M. This addition will add some muscle to its existing set of ad tech tools via which publishers can sell and buy online ads real-time. AOL plans on raking in revenue from 3rd parties via tech Stack. In addition, its publishing properties such as as well as the Huffington Post will get assistance.

AdapTV has the potential to be a significant growth-driver for the company if the online videos market keeps growing. This particular segment can be the breath of fresh air for AOL at a time when there has been a decline in the online advertising business specifically due to a dip on display ad rates.

The company’s most current earnings report and acquisition is a distinct growth-indicator for AOL in comparison to the first half of 2012 when its publishing and ad business was literally struggling and the company has been offloading assets like cash and its patent portfolio.

About Steve Raasch

Steve Raasch is a breaking news reporter for GDP insider. During his nearly two decades of editorial experience, Steve has covered a variety of topics including small business, health, personal finance, advertising, workplace issues and consumer behavior. Steve is very passionate about his work. Steve earned a master of arts degree in international relations from the Johns Hopkins University School of Advanced International Studies in Washington.

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