Q1 Revenues: Idearc and AOL

Idearc reported Q1 revenues this morning:

Internet revenue of $68 million in the first quarter of 2007 reflected continued strong performance with more than 30 percent growth compared to the same period in 2006 and a 36 percent increase in network searches. Superpages.com’s consistent strong performance was driven by solid growth from all sales channels, increased traffic and pay-for-performance product offerings.

Monetizing Local Search – Superpages.com is a key growth area. Superpages.com’s unique mix of fixed-fee and performance-based products appeals to a broad set of advertisers. In the first quarter, the company:

  • Launched a new suite of performance-based advertising packages, which contributed to a solid increase in sales.
  • Advanced its strategy of presenting relevant advertiser content to high-quality targeted leads by signing agreements with abcsearch.com and Local.com to place Superpages.com advertisers on their sites. Superpages.com has agreements that place our customers’ ads on more than 200 other Internet sites, including Google®, Yahoo! and MSN.
  • Increased national Internet sales presence by opening an additional office in Alpharetta, Ga. This expansion increases Idearc’s ability to attract new advertisers and capture additional revenue.

TW/AOL reported (.pdf) Q1 advertising revenue growth and continued subscriber losses:

Leading the quarter’s performance were double-digit profit increases at both AOL and Time Warner Cable. AOL continued to build momentum with its advertising-focused strategy, growing its advertising revenues 40% compared to last year’s first quarter.


Revenues declined 25% ($499 million) to $1.5 billion, due to a 43% decrease ($665 million) in Subscription revenues, offset in part by a 40% increase ($157 million) in Advertising revenues. The decline in Subscription revenues was due to a decrease in domestic AOL brand subscribers, which reflects in part AOL’s previously announced strategy to offer its e-mail, certain software and other products free of charge to broadband users in the U.S., as well as the sales of AOL’s Internet access businesses in the U.K., France and Germany (approximately $300 million). Advertising revenues reflected strong growth in sales of advertising on Partner Sites, as well as display and paid-search advertising on the AOL Network. In addition, Advertising revenues included a benefit of approximately $19 million related to a change in an accounting estimate resulting from more timely system data. Excluding this $19 million benefit, Advertising revenues grew 35%.


During the first quarter, AOL had 111 million average monthly domestic unique visitors and 44 billion domestic page views, according to comScore Media Metrix, which translates into 132 average monthly page views per unique visitor.

As of March 31, 2007, the AOL service had 12.0 million U.S. access subscribers, a decline of 1.2 million from the prior quarter and 6.6 million from the year-ago quarter, reflecting subscriber losses due in part to AOL’s strategy to prioritize its advertising business.

The sale of AOL’s Internet access business in Germany was completed on February 28, 2007.


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