AOL Inc., in its first earnings statement as a standalone company, reported a profit in the fourth quarter despite a 17 percent drop in revenue.
AOL reported net income of $1.4 million, or 1 cent per share, in the fourth quarter of 2009 compared with a net loss of $1.96 billion, or $18.52 per share, in the fourth quarter of 2008. During the year-ago quarter, AOL took $2.2 billion charge to write down the value of the company.
Revenue in the quarter declined to $809.7 million from $974.2 million a year ago.
AOL, which is working hard to improve its advertising revenue, suffered declines in all but one category in the fourth quarter. Domestic display advertising revenue grew 1 percent to $151.7 million, but was offset by a 22 percent decline in international display ad revenue to $24.7 million, dropping overall display ad revenue 3 percent to $176.4 million. Search and contextual advertising fell 19 percent to $145.4 million and third party network advertising eased 1 percent to $149.8 million. All told, advertising revenue declined 8 percent to $471.6 million.
Subscription revenue fell by 28 percent to $307.4 million as AOL’s subscriber base continues to erode. Some 1.9 million Domestic subscribers departed during the quarter. AOL, which at one time had more than 20 million subscribers, ended 2009 with fewer than 5 million.
For all of 2009, AOL said that it earned $248.8 million, or $2.35 per share, compared with a loss of $1.53 billion, or $14.42 per share, in 2008. Full year 2008 revenue declined 22 percent to $3.3 billion.
AOL has made dozens of acquisitions in recent years to enhance the multimedia and marketing capabilities of its stable of Web properties. Last month AOL purchased Nashville-based StudioNow in a deal valued at $36.5 million. StudioNow allows users to create and distribute video online.
AOL (NYSE: AOL) was officially spun-off from former parent Time Warner (NYSE: TWX) in December. Though it has reduced its workforce by a third since then, it still has a significant presence at its Northern Virginia campus in excess of 1,000 employees