Though it's no longer a part of Time Warner, AOL is still serving America online. The Web portal serves users with an array of content and communication tools, including sites for news (TheHuffingtonPost.com), maps (MapQuest), entertainment (Moviephone), local information (Patch), and technology (Engadget and TechCrunch). AOL primarily earns revenues through display, search, and contextual advertising (AOL Advertising) sales. It sells ads on AOL Properties as well as its Third Party Network (third-party sites). Search is provided through a deal with Google. AOL still offers dial-up Internet access to 3.3 million subscribers in the US. Time Warner spun off AOL to shareholders at the tail end of 2009.
Geographic Reach
AOL Networks has advertising operations in the US, Canada, and Europe, as well as in Japan through a joint venture with Mitsui & Co., Ltd. AOL Networks segment also has an expanded global presence through its goviral operations, primarily in Europe.
Operations
AOL has three segments which includes the Brand Group, the Membership Group, and AOL Networks. The Brand Group segment include the performance of AOL’s advertising offerings on a number of owned and operated sites, such as AOL.com, The Huffington Post, Patch, TechCrunch and MapQuest. The Membership Group segment include AOL’s subscription offerings and advertising offerings on Membership Group properties, including communications products such as AOL Mail and AIM, as well as from performance compensation for marketing third party products and services. AOL Networks (formerly the Advertising.com Group) segment include the performance of Advertising.com, ADTECH, sponsored listings, Pictela, goviral and AOL On.
Sales and Marketing
In the online advertising and marketing services segment, AOL continues to trail its rivals, Google, Yahoo!, 24/7 Real Media, and Conversant.
The company's advertising strategy is to lessen the number of ads on AOL sites in order to reduce clutter on pages and make them load faster. It also offers premium advertising formats that focus on aesthetic quality, impact, and interactivity. In addition, it is growing its presence in the local online ad market by investing in its Patch Media service, which provides local information and services for towns and communities.
Financial Performance
In fiscal 2013 the company reported an increase in annual revenue. It brought in about $2.3 billion in fiscal 2013, up from $2.1 billion in fiscal 2012. The spike was largely the result of increased revenue from advertising.
AOL's net income decreased by more than 90% in fiscal 2013 compared to the previous year mainly because of increased costs of doing business. The company's cash flow also decreased in fiscal 2013 compared to fiscal 2012 levels.
Strategy
AOL's business strategy is focuses on showcasing original, advertising-supported content. Google powers AOL searches through a partnership that extends through 2015. As part of the agreement, Google also provides AOL with mobile search, and brings AOL's video content to Google's YouTube.
Mergers and Acquisitions
AOL has a long history of acquisitions. Most recently, the company acquired Gravity for approximately $82.4 million in cash in 2014. Gravity provides content personalization technology and publisher solutions for advertisers.