AOL’s Portal Business: Worth About $10-$15 Billion*

Based on Time Warner CEO Dick Parsons comments at Goldman’s conference, we can do some simple maths and conclude that AOL’s portal business is worth about $20 billion.

Parsons said AOL’s access business, which it plans to sell in 12-18 months, generates the majority of the company’s profit.  If we assume this means that the advertising business generates just under 50% of the profits (could be significantly less), this suggests the portal generates about $2 billion in annual revenue and just under $1 billion in  EBITDA.  Applying an EBITDA multiple of, say, 20x, we estimate that the portal business is worth about $20 billion.

*UPDATE: In the original post, we estimated $20 billion.  After getting additional information suggesting that AOL’s media business is far less profitable than we thought, we revised this estimate to $10-$15 billion, with a bias toward the lower end of that range.

See Also: Estimating AOL Q3/Q4 EBITDA Drop
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