AOL Inc said it expected domestic display revenue to decline in the first half of the year, after reporting a lower-than-expected quarterly revenue. Shares of the owner of the Huffington Post news website and the TechCrunch blog fell as much as 14 percent in early trading. "I would expect domestic display revenue to decline in high single digits in the first half of the year," AOL Chief Financial Officer Karen Dykstra said on a conference call.
Advertising has become a major revenue stream for AOL as the company moves away from dial-up subscription service, helped by acquisition of automated advertising platforms such as Adap.tv. Revenue in AOL's properties display business fell 6 percent in the December quarter due to absence of about $12 million from shuttered brands, including Patch.
Dykstra said a salesforce realignment would have a positive impact on sales in the second half of 2015, and even more in 2016. Subscription revenue declined 5.5 percent to $148.1 million, as the company's domestic subscriber numbers fell 12 percent to 2.2 million. Revenue in AOL's ad platform business, where the company helps advertisers place ads on other digital properties, rose 20.2 percent to $330.6 million. Total revenue rose 4.6 percent to $710.3 million, but fell short of the average analyst estimate of $721.8 million, according to Thomson Reuters I/B/E/S.