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Tech Upswing Misses AOL

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While Web firms show upbeat results, Time Warner unit lags

Cautious optimism was in the air last week, with several Internet-centric companies reporting positive fourth-quarter and full-year 2003 results. One major exception: America Online.

While digital marketing and technology companies, including aQuantive, DoubleClick and Digitas, are experiencing a resurgence, the Time Warner unit posted a 5 percent overall revenue decline last year, due in large part to a 40 percent drop in ad revenue. "We're talking about turning around the Titanic here," said Geoff Ramsey, CEO of research and analytics firm eMarketer.

Some of the blame can be traced to the expiration of legacy ad contracts. Ramsey said those deals, made in 1998-99, "overhype what the real dollars should have been back then, such that comparisons now look really anemic." He predicts the company will reverse its fortunes by the end of the year.

Meanwhile, Seattle-based aQuantive, parent of Avenue A and iFrontier, reported fourth-quarter net profit of $4.1 million on revenue of $63.9 million, up from net income of $1.7 million on revenue of $44.4 million in the year-ago period.

DoubleClick recorded fourth-quarter net income of $3.8 million, or 3 cents per share, compared to a net loss of $54 million, or 40 cents per share, a year ago. The company's fourth-quarter revenue rose 10 percent to $72.9 million. Boston-based Digitas' fourth-quarter fee revenue rose 4 percent to $53.4 million, and net income totaled $8.1 million, or 11 cents per share, up from $1.7 million, or 3 cents per share, a year ago.