Huffington Post And Whether It's Good Or Bad For AOL
AOL: A Business Model In Transformation
Shaun Currie, CFA
Shaun Currie, CFA
Buy AOL: 2013 Will Be A Pivotal Year
Helix Investment Research • 10 Comments
Helix Investment Research • 10 Comments
Apr. 28, 2015, 8:59 PM
- AOL and NBCUniversal (NASDAQ:CMCSA) have signed a distribution deal that significantly expands AOL's licensed content using NBC's collection of properties from across broadcast and cable.
- Specific content wasn't spelled out but it will include programming from NBC as well as cable nets like MSNBC, Bravo, CNBC, Oxygen, and USA Network, among others.
- AOL will begin to stream clips and segments this summer through its various platforms, and eventually the deal may evolve into AOL "brand experts" appearing on NBC platforms, and the two companies working on original Web video series together.
Feb. 11, 2015, 12:14 PM
- "I would expect domestic display revenue to decline in high single digits in the first half of the year," CFO Karen Dykstra stated on the Q4 CC.
- The remarks come after AOL reported display ad sales for AOL properties fell 6% Y/Y in Q4, and U.S. PC visitors to AOL sites fell 11%. Yahoo's display ad ops are also having a rough time amid an industry shift towards mobile ad sales, programmatic (automated) ad buys, and native ad formats such as sponsored stories.
- Dykstra promises AOL's salesforce restructuring (first reported last month) will boost ad sales in 2H15, and moreso in 2016.
- Shares have fallen to their lowest levels since October.
- Q4 results, details
Feb. 11, 2015, 9:29 AM
- AOL's display ad sales for its own properties fell 6% Y/Y in Q4 to $171.5M, worse than Q3's flat growth and driving the Q4 revenue miss. The loss of disposed/shuttered brands such as Patch had a $12M revenue impact vs. $10M in Q3.
- Contributing to the display weakness: Average U.S. monthly PC visitors to AOL properties fell 1% Q/Q and 11% Y/Y to 107M. Mobile growth apparently wasn't able to offset.
- AOL properties search revenue was healthier, rising 6% to $108.2M (3% growth in Q3). 3rd-party properties revenue rose 16% to $259.9M thanks to the Adap.tv video ad unit and programmatic ad sales growth. Other revenue (service/platform fees) grew 48% to $22.6M. Across business segments, programmatic revenue grew 250% in 2014.
- Subscription (dial-up ISP) revenue fell 5% (same as Q3) to $148.1M. U.S. subscribers fell 3% Q/Q and 11% Y/Y to 2.22M. ARPU was $21.18, down slightly from Q3's $21.35 but up from $20.01 a year ago.
- Free cash flow was $85.8M, +42% Y/Y and exceeding adjusted net income of $75.8M. Cost of revenue rose 6% Y/Y to $526.2M (compares with 5% revenue growth), and G&A spend fell 3% to $82.1M.
- Q4 results, PR
Feb. 11, 2015, 9:13 AM
Feb. 11, 2015, 7:11 AM
- AOL (NYSE:AOL): Q4 EPS of $0.92 beats by $0.20.
- Revenue of $710.3M (+4.6% Y/Y) misses by $11.54M.
Feb. 10, 2015, 5:30 PM
Jan. 30, 2015, 12:10 PM
- TechCrunch reports parent AOL (AOL -1.5%) is laying off 150 workers (~3% of its workforce), folding its Joystiq (gaming) and TUAW (Apple news) sites into Engadget, and folding its AOL Autos site into Autoblog.
- Re/code previously reported AOL is likely shuttering Joystiq, and is planning a big restructuring of its ad sales teams. Q4 results are due in 12 days.
Jan. 28, 2015, 10:43 AM
- Citing rising competition, Wells Fargo has downgraded AOL to Market Perform ahead of its Feb. 11 Q4 report.
- The downgrade comes on a week that has seen Re/code report AOL is likely shuttering gaming site Joystiq and carrying out a major restructuring of its ad sales teams. The latter is said to be driven by the online ad market's ongoing shift towards programmatic (automated) ad buys; programmatic now accounts for 40% of AOL's ad business.
Jan. 21, 2015, 11:58 AM
- AOL (AOL +0.9%) will report Q4 and full-year results before the open on Wednesday, February 11th. The conference call will begin at 8.00 am ET.
- Consensus views for Q4 and 2014 are for EPS of $0.72 and $2.02 and revenue of $723M (+6.5% Y/Y) and $2.54B (+9.5%), respectively.
Jan. 12, 2015, 12:19 PM
- Though it likes AOL's improving asset portfolio, Cowen is less fond of the company's valuation at current levels, and is thus downgrading to Market Perform.
- Shares remain above where they traded before Bloomberg reported last week Verizon had approached AOL about a possible acquisition or JV. Both Verizon and AOL dismissed the M&A talk, but didn't comment about the reported JV discussions.
- AOL currently goes for 19x 2015E EPS, and 1.4x 2015E sales. The 2015 revenue growth consensus is at 7.6%.
Jan. 8, 2015, 11:39 AM
- Though Marissa Mayer (NASDAQ:YHOO) is reportedly uninterested in a deal and Tim Armstrong (NYSE:AOL) has dismissed the M&A speculation swirling around his company, activist Starboard Value is once more reiterating its call for a Yahoo/AOL merger.
- Starboard argues a merger would yield cost synergies of $1B-$1.5B/year, help Yahoo carry out "a tax-efficient separation" of its Alibaba/Yahoo Japan stakes, and create "a strong growth platform given AOL's progress in mobile and video advertising."
- The firm also says it's "increasingly concerned" about reports stating Yahoo is thinking of making a big media acquisition with its Alibaba IPO proceeds. In addition, it's not happy with speculation Yahoo is "considering a cash-rich split-off as a structure to separate its non-core minority equity interests," rather than "a spin-off structure or other available alternatives to unlock the full value of the stakes in Alibaba and Yahoo Japan."
- Yahoo has said it will offer more details about its plans to tax-efficiently monetize its remaining Alibaba stake during its Q4 earnings CC (set for Jan. 27).
- Both Yahoo and AOL are rallying. The Nasdaq is up 1.7%.
Jan. 8, 2015, 4:43 AM
- "There's always speculation around us because we have taken a company that was not doing well and ended 2014 with two straight years of growth," announced AOL (NYSE:AOL) chief executive Tim Armstrong, dismissing talks of possible mergers.
- The company had recently been linked to rumors of a possible joint venture with Verizon (NYSE:VZ) and a merger with Yahoo (NASDAQ:YHOO).
- Previously: Verizon CEO throws cold water on AOL acquisition rumor (Jan. 06 2015)
Jan. 6, 2015, 11:21 AM| Jan. 6, 2015, 11:21 AM
Jan. 5, 2015, 7:37 PM
- Bloomberg reports Verizon (NYSE:VZ) approached AOL about a possible takeover or JV to expand its mobile video offerings. No "formal proposal" has been made.
- Reporter Alex Sherman states Verizon's main interest is in mobile video, and that it's unclear if Verizon has any interest in AOL's media properties (Huffington Post, Engadget, TechCrunch, etc.). A JV would reportedly cover ad technology; AOL is a major player in the fast-growing programmatic (automated) online ad-buying market.
- AOL is #3 on comScore's rankings of U.S. online video property owners (behind Google/YouTube and Facebook), and is #4 on its rankings of U.S. video ad platforms (in terms of reach). The company also maintains a dial-up ISP base that (as noted by a source) Verizon could try converting to FiOS.
- Activist Starboard Value has been pushing for Yahoo and AOL to merge. Verizon's track record with Web/mobile content is pretty spotty.
- AOL +10.6% AH.
Dec. 1, 2014, 4:44 PM
- Re/code reports AOL has bought Vidible, a startup that helps video publishers syndicate and monetize their content, for ~$50M.
- Vidible claims to offer a "curated library" of 300K+ premium videos. The company also provides analytics and content-discovery tools.
- AOL has already shown a strong interest in the Web content distribution market: The company bought video syndication startup 5Min for $65M in 2012, and article-recommendation platform Gravity for $95M in January. AOL also shelled out $405M last year to buy video ad platform Adap.tv.
- While AOL's display ad sales for its own properties were nearly flat Y/Y in Q3, its 3rd-party platform ad sales were up 44% (22% excluding Adap.tv).
- Update: AOL has confirmed the acquisition, but hasn't disclosed a purchase price.
Nov. 17, 2014, 3:38 AM
- Amid a campaign to merge AOL (NYSE:AOL) and Yahoo (NASDAQ:YHOO), activist investor Starboard Value has revealed that it bought a 2.4% stake in AOL in the third quarter.
- Starboard also took a stake in Yahoo during the same period, urging CEO Marissa Mayer to consider a combination of the two companies.
- Starboard has disclosed the size of its position in Yahoo, listing 7.7M shares, or about a 0.8% stake, putting it just outside the list of top 10 shareholders in the company.
- Previously: Activist Starboard takes stake in Yahoo, calls for AOL merger
AOL Inc is a media technology company that provides internet content with brands, products and services that it offers to consumers, advertisers, publishers and subscribers.
Industry: Internet Information Providers
Country: United States
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