Is AOL Finally Making Money From Content? Maybe!


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One of the perennially weird things about AOL is that it’s a content company that doesn’t make money from content: All of its actual profit has come from subscribers to its old Internet-access business, which still has 2.5 million customers,* who pay $20 a month to get online.

But now, in 2013, more than four years into Tim Armstrong’s tenure as CEO, that may be changing.
In AOL’s Q3 earnings report today, AOL announced that its “brand” business — the group that operates and sells ads on AOL.com and the other sites AOL owns and operates, like the Huffington Post and TechCrunch — made money.

Sort of. If you squint at it the right way. Using an unofficial metric called “Adjusted OIBDA,” AOL said its brand group made $10.9 million in the last three months.
And if you look at all of 2013 to date, that performance holds up: AOL said the brand group’s Adjusted OIBDA for the first nine months of the year was $4.6 million.

This is the first time AOL has been able to say that its brand group has positive Adjusted OIBDA. On the other hand, AOL only started breaking out its “brand” business as a category last year, so it’s hard to make a real apples-to-apples comparison.

More important is that Adjusted OIBDA isn’t a “real” accounting metric. It leaves out lots of costs that traditional accounting requires, like depreciation and amortization, as well as one-time costs like restructuring charges.

AOL argues that looking at the number is helpful because it gives you a good idea of its “core operating performance.” Lots of other companies use similar metrics to tell investors the best possible story about their performances. Twitter, for instance, highlights a metric it calls “Adjusted EBITDA” in its IPO filings.

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About Doru Somcutean

Hello, my name is Somcutean Doru and I'm from Romania.

I really like to read reviews and see what's new about technology, on D-BLOG I share with you articles/reviews that I find interesting. I also write some reviews in romanian...

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