AOL's Ad-Tech Business Grows 54%

The ad-tech side of AOL's business continues to generate impressive results, growing 54% over the past year, according to the company's second-quarter earnings report. It was an overall strong quarter for AOL. The company's revenue grew 12% to $606.8 million, beating analyst estimates of $595.5 million. And earnings per share came in at 45 cents, beating estimates of 44 cents. But the programmatic side, reported under AOL Platforms, stood out. "We're beginning to see result of management focus on providing end-to-end display solution through programmatic and building of online video exposure," said Peter Stabler, a senior analyst at Wells Fargo Securities, in an email following the earnings release. AOL is betting its future on three pillars: ad-tech, digital video and premium content. Over the past few years, the company assembled a stack of programmatic technology solutions -- including the video ad exchange Adap.tv and attribution company Convetro -- which it plans to build into a single interface called "One" within the coming months. The growth, as Mr. Stabler notes, is a sign that the ad-tech bet is starting to pay off. Both Magna Global and, recently, Havas have signed on as clients for One. The platform gives these agencies the ability to buy both AOL inventory and ads across the web. At the moment though, ad-tech is not critical for AOL's sustainability. Most of the company's operating income still comes from the subscription side of its business. But there is no guarantee how long that division -- which still includes dial-up services -- will be continue to provide cover for the company's other pursuits. Over the past year, AOL's subscription revenue fell 7%. Wall Street liked what it saw from AOL today, sending the company's share price up over 4% in early trading.

AOL's Ad-Tech Business Grows 54%

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