AOL reported a major decline in profit on Wednesday. The company posted a first-quarter profit of $4.7 million, an 86 percent drop compared to the $34.7 million it made in the same period last year. Revenue also fell, by 17 percent to $551.4 million.
AOL’s acquisition of the Huffington Post played a major role in the losses. Expenses related to new properties HuffPo and goviral topped $9 million, plus AOL shelled out $8.4 million in compensation expenses to retain key talent. The quarter’s losses were also affected by $27.8 million in HuffPo restructuring expenses and a reassessment of AOL’s India operations.
There was some good news. Although total ad revenue fell 11 percent, global display ad revenue grew 4 percent. “Today represents an important milestone in the turnaround of AOL as global display revenue grew for the first time since the fourth quarter of 2007,” said AOL chairman and CEO Tim Armstrong in a conference call.
Armstrong also said in the call that the latest quarterly results exceeded his expectations and that the company hopes to decrease costs and provide more content in the future.