AOL thanks asset sales for profit as advertising crashes

AOL today said third quarter revenue had crashed by more than a quarter, and posted steep declines in search and display advertising as well as subscription sales.

Assets sales helped lift third-quarter net income to $171.6 million (£106.5 million) as AOL tried to reshape itself into a media and entertainment web hub. It has redesigned its home page to feature video more heavily.

The 26% decline in revenue was not as bad as analysts feared, but suggests the company still needs to attract advertisers willing to spend big on the website. Advertising revenue fell 27% to $292.8 million (£181.8 million) on declines in search, display and third-party ads.

Overall, revenue fell to $563.5 million (£350 million), compared with the $557 million expected by analysts.

By contrast, Google reported a sharp rise in search and display advertising revenue, while Yahoo showed stronger display advertising sales.

AOL's subscription revenue also dropped, falling 26% to $244.8 million (£152 million). Last year AOL posted net income of $74 million (£46 million).