Time Warner (TWX) AOL: Mid-Quarter Update

Based on additional research into the current situation at AOL, we are modestly tweaking our estimates for this quarter.  Subscription revenue stays the same, but we expect advertising revenue will be a slight bit better than we had previously forecasted, for two reasons:

  • The disastrous change to the search interface that socked revenue last quarter has been reversed, so the search business is performing better.
  • The network (Ad.com) business is still strong.

We now estimate that AOL will show year-over-year revenue growth of about 15% in Q3, about the same as last quarter.  Nothing to write home about, but a slight bit better than the 10% growth we had previously forecasted.

We do not expect this modest positive to forestall massive layoffs, which we expect to hear about in October.

See Also:
AOL Mass Layoffs All But Confirmed
AOL Divisional P&L

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