There’s some good news buried within that pile of rubble known as AOL. For one thing, the Time Warner company is still throwing off nearly $1 billion of EBITDA per year, which is more than Microsoft, at least, can say for itself. For two, the company has gotten at least a couple of quarters of bad news out of the way (we hope), so it should be smooth sailing for a while. For three, it’s not just Advertising.com, Tacoda, and the low-margin network business that are cranking along–some of AOL’s content properties are, too.
- AIM has stalled of late, but it is still the industry standard.
- TMZ, AOL’s homegrown celebrity gossip site, continues to roar.
- Weblogs, the Jason Calacanis vehicle starring such sites as Peter Rojas’s Engadget, is cranking.
- Truveo, the video search portal, which just announced a new international expansion, is not only growing–it’s one of the few online video business models that we think will work.
- Bloggingstocks, a new AOL Money property, recently had traffic levels that passed Seeking Alpha, the largest independent investment blog.
- Mapquest has lost a ton of mindshare to Google and Microsoft and has been under-invested in, but it still has 50 million users a month (per Compete).
(Any properties we’re forgetting? Please note in comments or send to [email protected]).
Why does this matter? Because the majority of AOL’s advertising revenue still comes from AOL properties, and the vast majority of AOL’s advertising EBITDA comes from these properties (the network business may be sexier right now, but it’s also lower margin). Some of AOL’s properties–email, for example–are likely to wither away with the dial-up subscriber base. But some of the newer brands, and perhaps even some of the AOL brands, have a bright future, regardless of what happens to the subscriber base…
We need to do some additional research to figure out how much of AOL’s owned-site advertising revenue is coming from its promising properties instead of its dying ones, but here are some round numbers:
In Q2, AOL generated a total of $522 million of ad revenue. Of this, $145 million (a bit more than a quarter) was network revenue–low-margin remnant advertising that appears on third-party properties. The rest, $377 million, or $1.5 billion annualized, came from AOL properties.
Of this $377 million, $156 million came from Search and $221 million came from Display. It’s the Display revenue ($1 billion annualized) that’s at issue here.
The Hot Properties
We’ll explore some of these properties in depth in future posts. In the meantime, here are some snapshots of recent traffic trends, starting with Truveo, the video search portal: