Internet and media stalwart AOL on Tuesday reported that it generated losses in the second quarter, mostly due to weak advertising growth.
AOL is in the midst of pumping its resources into popular blogs like The Huffington Post and local news organization Patch. The company has been trying to innovate to keep up with other media companies, and it just launched its “Editions” iPad magazine. The company also plans to launch a subscription-based music service later this summer.
The company reported a net Q2 loss of $11.8 million, which was certainly better than its $1.06 billion the year before. Total revenues for the quarter came in at $542.2 million, down 8 percent compared to the second quarter of 2010.
AOL’s biggest culprit for its losses was weaker-than-expected advertising growth. Ad revenues grew just 5 percent to $319 million, but the company tried to keep that portion of the news upbeat.
“AOL’s return to global advertising growth for the first time since 2008 reflects the hard work of our team and another meaningful step forward in the comeback of the AOL brand,” said Tim Armstrong, Chairman and CEO, in a statement.
The company also had a 23 percent loss in subscription revenues for the quarter with $201.3 million earned compared to $260.2 in Q2 2010. But these numbers aren’t surprising as fewer people use AOL to connect to the Internet each year.
AOL’s share price fell to a 52-week low of $13.40 per share after news of its weak second quarter was released. However, it should be noted that this movement follows an extremely volatile day on the stock market due to the downgrade of U.S. debt by Standard & Poor’s.
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