21 July 2000

In defiance of the recent worldwide downturn in e-fortunes and stock market expectations, America Online sailed triumphantly to better-than-doubled profits during this year’s second quarter.

Posting an after-tax profit for the period of $338 million compared with $157m year-on-year, AOL’s earnings per share were up from 6 cents to 13 cents – two cents better than most analysts’ predictions.

By the end of the quarter, AOL had notched 23.2m paid subscribers to its flagship service, with concomitant increases in advertising and e-commerce revenues. Ninety-five percent up at $609m, these accounted for 32% of AOL's total revenues for the period.

Commenting on the planned merger with Time Warner, AOL chief operating officer Bob Pittman said the deal offered “considerable new opportunities”. Of AOL and TW’s combined one hundred biggest advertisers, he claimed, only four overlap. This created opportunities to cross-sell advertising space as well as services to those consumers who subscribed to both companies’ services.

News source: Financial Times