Restructuring AOL Admits Ad Revenue Woes

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aol.jpgADOTAS – Restructuring and reinvention is no tea party — take it from AOL. As a result of all the shedding it’s done since spinning off from Time Warner in December, total advertising revenue dropped 27% year over year in the second quarter, with a 52% decline in international display revenue, or about $10 million dollars.

That dip may drop some jaws, but it’s not bad considering that in January AOL closed several overseas operations — including Germany, Sweden and Spain — that CEO Tim Armstrong called “wildly unprofitable.” In addition, AOL said it had drastically reduced operations in France, Germany and elsewhere around the world

Total display revenue fell 13% ($18 million) as domestic display took a 7% dive — which executives subscribed to halving available domestic inventory. In general, AOL estimated that 17% or $70 million of $110 million ad revenue were a result of self-enforced initiatives.

But there’s a bright side, Armstrong said — homepage campaigns sold to “premium advertisers” (the big brands) increased from 40% in second-quarter 2009 to 60% in second-quarter 2010.

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