Despite Slowdown in Ad Growth AOL 'Feels Good'

21 August 2007

DULLES, Virginia: Time Warner unit AOL is in bull mode, according to its chairman/ceo of nine months tenure, Randy Falco (pictured) - despite the firm's failure to match the average ad revenue growth of its online peers.

Although AOL's online display advertising income grew by a respectable 16% in the last quarter, it undershot by five percentage points the industry average of 21%.

This was described as a mere "hiccup" by Falco, the former NBC Universal president/coo who was parachuted into in the AOL hotseat in November 2006. It did not, he insisted, imply any "radical disruption" to AOL's progress.

Instead, the decline in display advertising growth and search revenues reflected the online giant's focus on improving content in areas such as news, finance, health and music.

Rah-rahed Falco: "We have four objectives. Revamping programming, becoming a truly global company, building a better ad-serving platform and focusing on getting the cost structure right for the company. We feel good about next year. The pieces are in place."

Some analysts and investors have aired concerns that AOL will continue to underperform the sector well into next year, thereby reducing the potential for increases in Time Warner's share price, already down 17% this year.

Reviewing his stint in the hotseat, Falco's innate modesty shone through: "We did more in the last six or seven months than had been done in the last four years, he said.

Data sourced from Financial Times; additional content by WARC staff