Internet advertising is most definitely expected to rise quite a bit in the next few years. But the last 12 months for AOL haven’t been particularly appealing. No, the company hasn’t done terribly. But given the measured growth of its competitors in the Web giant field, namely Google and Yahoo, its report of a decline in revenue for the first quarter of 2008, positioned against rather substantive increases at Big Y and G, doesn’t look so good. According to a press release by Time Warner, its parent company, Big A showed revenue of $1.13 billion in the first three months of the year, down from $1.46 billion in the same period for 2007.
Analysts of Time Warner’s full financial data set predicted the outcome rather aptly. Prior to the official release of the figures, one individual, Michael Norris of UBS, said quite plainly: “We maintain our position that Time Warner would be better positioned for growth following a full divestiture of AOL.”
There is no doubt that AOL stands as a rather valuable property. Its services, while not the most popular of the Web (we speak of properties like Mail, Video, etc., not its main Web search tool, which it has licensed from Google), are employed by many millions of users on a daily basis. It is something of a less weighty version of Yahoo, if you will. Yet it has spent the past several years trying to gain among its more powerful contenders, and it simply hasn’t been able to make significant inroads. Whereas Yahoo seemed in years past to routinely follow the example set by Google, AOL followed the market in general, and in the grand scheme of things, never made a unique splash of its own.