Business

No joke: AOL’s dialup subscriptions still generate more cash than display ads

Image Credit: Ilustration by Tom Cheredar

AOL has remained adamant that the future of its business is in advertising, but that doesn’t mean that’s the only place the company makes its money.

Take for instance AOL’s dying dialup Internet subscription business, which charges people over $20 per month for access to the web that they likely don’t need anymore thanks to high-speed Internet services. The company reported $155 million in revenue from subscriptions in Q2 2014, which is down seven percent compared to the same period last year but is still pretty impressive.

And that figure is even more impressive when you compare it to what AOL makes in advertising dollars.

The company reported $144 million in display ad revenue for the quarter, down slightly from $146 million during the same period last year. This fits in line with the industry’s overall sentiment that display ads are dying. This might be concerning for a company like AOL that sees its future in advertising, but keep two things in mind: The company’s failed local news vehicle, Patch, weighs down display numbers, and its other ad segments are doing fine. AOL’s search revenue was up, as was revenue from third-party platforms. The company’s programmatic ad business is also up 35 percent from last year.

But demonstrating that it can grow its ad business quickly and intelligently is very important to AOL because it’s going to have to replace the slow burn of those dialup losses with ad revenue. For now, the company is able to do this through its new AOL One marketplace, which allows advertisers to more easily buy ad campaigns across multiple platforms and mediums, such as video.

It seems that AOL’s purchase of Adap.tv (a video ad buying platform) and its focus on other ad technology is paying off.

 

 

More information:

AOL Inc. (NYSE: AOL) is a brand company, committed to continuously innovating, growing, and investing in brands and experiences that inform, entertain, and connect the world. The home of a world-class collection of premium brands, AOL ... read more »

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18 comments
Vito Botta
Vito Botta

I can't believe there are still dial up connections in the US lol. Here in Finland broadband is human right since 2010 and thus you can have fast connections even in the forest :D I get ~75Mbps on mobiles and ~350Mbps at home. Can't imagine using a dial up connection today :D

Thomas Lidforss
Thomas Lidforss

I can understand rural parts of USA where you cannot use mobile broadband and where the old copper lines cannot support DSL, what do you do? Here in Scandinavia people complain if they don't get 20+ Mbits on their mobile phones. I get between 48-72 Mbits on mobile broadband in the laptop.

Manish Patel
Manish Patel

Netzero is still around too. How embarrassing for us. AOL is a perfect bottom feeder now.

Harsha
Harsha

Wait..! Could you add some more bits of Sarcasm..? :P

Chuck Fresh
Chuck Fresh

Great article. I was wondering how that was going.

Dave Mora
Dave Mora

Dial up is still a good business because a large percent of the country doesn't live in the top major markets where DSL or Broadband is the slowest option. We tend to forget that when all we do is live in a Large city.

Andrei Ion Rinea
Andrei Ion Rinea

dialup... oh the days... I switched to broadband in the previous millienium..