AOL Revenue Increased 2% in 2nd Quarter

AOL, the online portal that owns The Huffington Post and Patch, on Wednesday reported second-quarter revenue of $541 million, up 2 percent from the same quarter a year earlier.

In line with its ambitions to become a platform for live broadcasting and programming, the company also announced the purchase of ADAP.TV, a video advertising company that allows purchases across the Internet and television. The cost was $405 million.

AOL executives said in a phone interview that the acquisition was not so much about increasing their own content as it was to diversify the company’s earnings into a revenue stream that it thinks has tremendous potential.

AOL trumpeted the fact that its ad sales were up 5 percent, but overall digital ad spending in the United States grew by 14.8 percent, to $10.01 billion, in the second quarter of 2013 over the same period last year, according to eMarketer, an online advertising research firm.

Despite positive growth in advertising and traffic, up 3 percent year over year, the earnings revealed the company’s continued dependence on revenue from subscriptions to the AOL portal, a declining business. Looking at adjusted operating income before depreciation and amortization â€" or income earned from regular operations â€" the membership business was a net positive at $151.6 million, but still down 4 percent year over year.

Still, Wall Street reacted positively to what it saw, largely because AOL seemed to be cutting losses and heading in the right direction. The brand groups, for example, cut losses from $15.2 million for the quarter a year earlier to $1.4 million this last quarter. Losses increased in this area for AOL networks; the chief executive, Tim Armstrong, said that was because the company was in “investment mode.”

This article has been revised to reflect the following correction:

Correction: August 7, 2013

An earlier version of this article misstated the quarterly revenue for AOL. It was $541 million, not $361 million, for an increase of 2 percent, not 7 percent. The error was repeated in an earlier version of the headline.