AOL Sees Gains in Ad Revenue

Web conglomerate America Online (NYSE:AOL (News - Alert)) posted double digit growth in display ad revenue in the second quarter, soundly beating Wall Street’s expectation. AOL, a well known internet service provider, has seen describing subscription rates since 2002, and has branched out into web content in an attempt to diversify its business. The double digit increase in ad revenue comes as a pleasant surprise to the company’s investors, who have seen a 51 percent decline in their shares since January 1^st, 2011.

AOL’s ad revenue blowout was driven primarily by its acquisition of blogging powerhouse Huffington Post (News - Alert), the world’s most viewed blog site. According to  Digital Trends, the Huffington Post brought in 30 million unique viewers in the month of May, more than any other blog site in the same period.

The change in the AOL’s fortune comes at a time when its management is emphasizing the importance of increasing their company’s media and communications footprint.

“AOL is singularly focused on becoming the next great media company for the digital age,” said the company’s chairman and CEO, Tim Armstrong. “We have positioned our company’s best people, technology and assets in front of some of the best opportunities on the internet.”

The company’s shift towards content has so far not been sufficient to move their balance sheet into the black However, according to the company’s most recent quarterly report; it lost 11.8 million dollars on a revenue of $542.2 million, representing a net loss of 8 percent. The Q2 losses were lower than the second quarter losses in 2010, when the company lost $1.06 billion.

AOL’s management remains confident that the company will return to profitability.

“We’re witnessing encouraging metrics in key growth areas,” said Armstrong. “We’re seeing the beginning of this manifest in our reported numbers.”

AOL shares ended Tuesday down 25.75 percent, gaining 7.24 percent after hours.