NEW YORK (Reuters) - AOL Inc. has shown its Internet display advertising Rose first signs of recovery for the first time in three years.
Display ads, which are big splashy units that appear on web pages, are an important metric for AOL that it redefines itself in a central online media and seeks to become less dependent on its dial-up business subscription revenue.
On Wednesday, the company reported that advertising revenues display in the first quarter increased by 4% at the best price for ad units $ 130.5 million and high activity of automakers, consumer packaged goods and telecommunication advertisers.
"It looks like that they are beginning to turn the corner on revenues," said Ross Sandler an analyst with RBC capital markets.
Sent investors that AOL shares as much as 10 per cent higher in trade at the beginning, after the publication of the results. Later, they pared gains, but still increased by 4.3% to $21.28.
AOL, spun from Time Warner, about a year and a half earlier, tried to regain its former lustre. A decade ago, he was one of the most popular Internet destination dominated by e-mail.
He suffered a severe decline in advertising revenue - for example, in the fourth advertising revenue quarter slid almost 30% - as the Chief Executive Tim Armstrong revamped the inventory of advertising, while trimming costs and sales force.
Since the separation of Time Warner, AOL has been actively gobbling up sites related to media, including a purchase of 315 million of the Huffington Post in February.
"This is the first encouraging quarter since Time Warner spin," said Clayton Moran, analyst with Benchmark Co. "It is the first evidence that they would be able to achieve a turnaround in advertising."
The United States advertising has increased by 11% to 122.0 million, helped in part by the recent acquisitions of the Huffington Post and technology popular blog TechCrunch.
AOL executives said that the two acquisitions represented approximately $ 5 million to display advertising revenue.
The Huffington Post is on track to reach 50 million dollars of revenue in 2011, said AOL Chief Financial Officer Arthur Minson.
"It's a quarter of a milestone for us at AOL," Armstrong said on a conference call. "I believe that these changes are really bear fruit."
"The patient is operational autour," he said.
Overall advertising revenues fall 11 percent to 313.7 million over the decline in research and publicity of third-party network.
Total revenues of the company fell by 17% to 551.4 million. Analysts on average should total revenues of 536.4(2) million dollars, according to Thomson Reuters I/B/E/s
"I like these numbers for AOL," said Laura Martin, an analyst with Needham & Co. "I love the fact that the rate of churn (subscription) is lower." He said really slows the deterioration it will hold the gains. ?
Revenue from dial-up subscriptions has fallen by 24 per cent to 215.4 million.
Profit in the first quarter fell by 86% to 4.7 million, or 4 cents per share, compared to $ 34.7 million, or 39 cents per share, a year ago.
AOL adjusted earnings per share of 22 cents beat consensus of the street of 19 cents per share.
(Reported by Jennifer Saba in New York and Himank Sharma in Bangalore.) (Editing by Unnikrishnan Nair, Dave Zimmerman)
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