AOL’s Net Profits Plunge 86%

However, CEO Tim Armstrong put a positive spin on the numbers, saying the company posted its first gains in display advertising revenue since the last quarter of 2007. I applaud AOL for making gains in revenue, which looks promising. The company’s turnaround plan is beginning to take form. I haven’t marked AOL gone yet.

While I have been writing about social media companies reaping the benefits of the so called economic recovery, AOL has not been among those writings.

The Internet cornerstone continues to struggle. Variety reports lower revenues and profits for the first quarter. However, CEO Tim Armstrong put a positive spin on the numbers, saying the company posted its first gains in display advertising revenue since the last quarter of 2007. I applaud AOL for making gains in revenue, which looks promising. The company’s turnaround plan is beginning to take form. I haven’t marked AOL as out of tricks just yet.

”I am proud of the work completed thus far and we remain focused on accelerating our momentum through continued execution of our strategy to become the premier digital content company,” said Armstrong.

AOL’s revenues were off 17% to $551 million, while net profits sank 86% to $4.7 million or 4 cents per share. The acquisition of The Huffington Post in early March didn’t help the expenses with a reassessment of properties in India.

The upshot is that AOL’s global display ad revenues grew 4%. However, total ad revenue at the company was down 11% to $314 million, largely on big drops in search and contextual advertising.

Even though AOL is free, some subscribers remain and still pay for Internet access. That number fell 22% in the quarter.

In addition to buying The Huffington Post, AOL purchased TechCrunch, a leading Silicon Valley technology blog, in September.

According to AFP, other AOL properties include Engadget, Patch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog and StyleList.

AOL has invested heavily in Patch, which provides local news in hundreds of communities across the United States, but the company said Wednesday it did not expect Patch to be profitable next year.

Hopefully, AOL is going through some transitional growing pains and will come out the other end reaping in benefits. My fingers are crossed and the future looks promising. What do you think?