Tags: AOL | Huffington | Post | Deal

AOL Rides High Again, With Little Help from Huffington Post Deal

Wednesday, 13 Feb 2013 06:38 PM

By Andrew Packer

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AOL is riding high again.

In the wake of last week's SEC filing for the fourth quarter of 2012, which showed the company’s ad revenues surging, AOL share prices have popped more than 17 percent.

But the company’s success seems to have been driven more by advertising success and less by domestic content providers like the Huffington Post.

Overall, AOL appears to have banked an excellent year, with operating income growing 24 percent year over year. Ad revenue, especially in global ad sales, saw a 13 percent bump.

Editor's Note: Startling Proof of the End of America’s Middle Class. Details in the Video

The company, led by CEO Tim Armstrong, seems to have engineered a strong turnaround. Last year the company closed a $1.06 billion sale of some 800 proprietary AOL patents to Microsoft.

Over the past year, AOL shares have surged 94 percent, substantially outperforming the S&P 500’s 12.33 percent return.

The value increase was driven in part by a share buyback, as AOL reduced shares outstanding 19 percent in 2012.

But the company’s 2011 acquisition of the Huffington Post for more than $315 million has provided AOL little bang for the buck, according to the SEC filing.

In 2010, the year before the Huffington Post acquisition, AOL Brand Properties, its network of content web sites, captured an average of 111 million domestic unique visitors each month. 

In 2012, the year following the Huffington Post acquisition, the company saw online traffic remain flat – at 111 million average unique visitors to their sites. The SEC filing did not break out traffic by website.

And the AOL Properties segment has seen little impact on revenues in the aftermath of the Huffington Post deal.

According to segmented accounting analysis offered by the company, AOL Properties brought in $940 million in revenue in 2010. By 2012, with the Huffington Post, that number grew by less than 1 percent to $946 million.

Ad revenue totaled $937.6 million, up from $876 million in 2010. Overall ad revenue improvement appears to be driven especially by its AOL Networks, which offer third-party advertising through such outlets as advertising.com. In 2012, the third-party network contributed $472 million in revenue, up from $344 million in 2010.

Editor's Note: Startling Proof of the End of America’s Middle Class. Details in the Video

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