AOLís Ad Revenues: A New Business Model



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Code :BSM0021

Year :
2005

Industry : Internet and e-commerce

Region : USA

Teaching Note:Not Available

Structured Assignment :Not Available

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Introduction:By 2004, AmericaOnline Inc. (AOL) was the world's largest Internet access provider with 32million3 subscribers in US and Europe. AOL depended heavily on the subscription for its online services as its primary source of revenue and it constituted 67% of the total revenue. By September 30th 2004, the total number of subscribers of AOL in theUSdecreased to 22.7 million from 26 million in 2002. AOL lost 646,000 subscribers in the third quarter of 2004, resulting in a total loss of two million subscribers over a year in the US. AOL fell behind its competitors Ė Yahoo!, MSN and Google. AOLís ad revenueswere $221 million in the second quarter of 2004 as compared to $467 million of Yahoo! Inc. By late 2004, AOL began to revamp its sitewith innovative features and introduced a newadmodel to increase its revenues in order to regain its position among the top three Internet access providers in the world.

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