Time Warner (NYSE:TWX) reported Q1 earnings of $771 million today. The $0.21 per share earnings were just shy of the $0.23 street consensus and the big news from the announcement and earnings call was the news that they plan to spin out the cable business. But, the number that jumped out at me was the AOL results. In a quarter where Google beat their targets and Yahoo managed to hit theirs, AOL revenue was down from $1.46 billion to $1.13 billion over the same period a year ago.
PaidContent quotes new CEO Jeff Bewkes: "We were not satisfied with the performance of display advertising on our owned-and-operated network. ... We didn’t integrate Platform-A fast enough .. and that led to sales-channel conflict".
Whether it was the integration of Advertising.com and Tacoda or not, AOL needs to produce stronger results from its core advertising business. Analysts have long been clamoring for them to spin out AOL; as Google continues to grow and MicroHoo shakes out, they better get their act together before time runs out.
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