Overall display advertising rose 2% to $140 million from $138
million, but U.S. display revenue was flat at $127 million. AOL's
ad-network business continued a trend of successful results with
$111 million in revenue, up 19% from $94 million in the same
quarter last year. The overall U.S. online display market is
expected to grow 24% in 2012, according to eMarketer.
But perhaps the most interesting news was AOL CEO Tim
Armstrong's comments about upcoming changes to its hyper-local news
network Patch. Ad Age has heard in recent months that the
much-maligned news network was being rebuilt, with its original
code base totally scratched. On today's earnings call, Mr.
Armstrong alluded to this, saying that while the first generation
of Patch relied on journalists creating news about a town, the next
iteration will also push more into listings and commerce.
In an interview after the earnings call, Mr. Armstrong expanded
on these thoughts, saying that the new Patch, to be unveiled later
this year, "is really about unlocking the vitality in
towns...groups, commerce, and the social aspects of towns for a
much deeper, richer engagement level."
He was told that what he was describing sounded a little bit
like a social network. "You could call it community networking," he
responded. As for the listings business, he was asked if Patch was
trying to build a competitor to Craigslist. "Craigslist and other
companies like that that sell used merchandise haven't really
scaled into communities," he said. "They've been very
metro-focused. One of the opportunities for Patch...is the ability
for us on the commerce side to offer the people the ability to do
listings and other things like that locally."
AOL is still projecting $40 million to $50 million revenue for
Patch this year, the company said on its earnings call. Mr.
Armstrong also noted that Patch recently signed one of its largest
deals ever with a national advertiser. Still, about 90% of Patch's
ad revenue comes from local ad deals, Mr. Armstrong said in the