In March 11, the Prince’s Trust Internet & Media Leadership Group’s quarterly lunch featured Tim Armstrong– the CEO at AOL. He brought along Arianna Huffington whose Huffington Post he had just bought for $315m. I was seated at lunch between them and was rather ‘taken’. See My lunch date with Arianna Huffington. So much so that I went out and bought AOL shares. I figured that AOL’s move towards owning its content and reinventing itself as a news and media group was right. It proved to be one of the most ‘rewarding’ lunches I have had – as those AOL shares have more than doubled since.
It’s been a rocky ride though. Soon after I bought, AOL slumped. But in Apr 12, AOL sold some of their patents to Microsoft for $1b and the shares rocketed.
Then, during Hurricane Sandy, my US friends told me how AOL’s local Patch news service had been a lifeline. See my Nov 12 Patch in a Storm post. On the analyst call, Armstrong admitted that this had been something of a watershed for the service.
On Friday, AOL reported its first quarterly revenue growth for EIGHT years. Sure Q4 subscription revenues fell yet again by 10% (you do have to ask yourself why there are any dial up internet users left!) But Q4 advertising revenues grew by 13%. Q4 profits surged by 57%. For the year, revenues were flat at $2.2b but profits were $1.05b compared with just $13.1m in 2011.
In the way that only Americans can mangle a beautiful phrase, Tim Armstrong said “We have walked through the valley of the turnaround and gotten to growth.”