It was once one of the major players online and was even one of the first ISPs to begin to offer unlimited dial-up in UK, as well as helping to make broadband connections much more popular and easier to afford across a variety of different countries. During the nineties it’s hard to imagine many households that didn’t have at least one ‘free’ AOL CD dropped through their door. However, since the market for broadband and content providers exploded in the first few years of the 21st century, AOL hasn’t been doing so well, and it seems this trend is set to continue.
The latest decision from AOL was to cut Bebo loose after the site began to making major loses. However, the site was sold for what is rumoured to be no more than 10 million dollars, a tiny sum considering AOL purchased the site in only 2008 for a massive 850 million. The companies overall revenues haven’t looked any brighter either, with a drop of 26 per cent year on year.
The company issued a statement about their current problems:
“The underlying drivers of the impairment were a significant increase in net assets due principally to cash provided by continuing operations and a significant deferred tax asset associated with Bebo concurrent with a significant decline in AOL’s stock price since April.”
Where AOL might go next is anyone’s guess. It’s like the company won’t be dabbling in any more social networking sites any time soon, and despite a recent redesign of their content portal the huge amount of competition that exists today that AOL never had to worry about in the nineties makes it an unlikely source of revenue. The ISP side of the business is still doing quite well, but the company now has little chance of returning to being the internet giant it once was.
Analysts believe the company will post Q2 earnings of $602.1 million.
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