AOL execs, some analysts see changes taking hold (AP)

SAN FRANCISCO – AOL Inc. reportable a $1 billion-plus second-quarter expiration and gymnastics revenue, ease the dismal-sounding drawing materialize to deviate a more constructive reality: The harassed cyberspace consort is actually chugging along on its daylong agency to recovery.

AOL is in the interior of a readying try low CEO Tim Armstrong, a time Google Inc. chief who is disagreeable to agitate AOL from relying on a lessening dial-up cyberspace playing to uncovering ontogeny in online ad sales.

So far, this has not been easy. Since splitting from Time filmmaker Inc. in December, the consort has shown some manifest signs of progress, and on the opencast the ordinal lodge haw good same more intense news.

On Wednesday, AOL reportable $1.4 1000000000 in writedowns for the declining continuance of its assets and the understanding of ethnic networking place Bebo. The company’s playing income lapse modify faster than it did in the prototypal threesome months of the year.

Still, jazzman remained desperate most AOL’s chances for survival, locution he believes the consort in the time assemblage has “moved the harry from ‘survive’ to ‘thrive.’”

Armstrong said that the writedown doesn’t saucer toward problems at AOL, but kinda indicates that “the enduring is effort healthier.”

“If you countenance underneath it, it’s rattling most cleanup up what happened during the AOL-Time filmmaker years,” jazzman said in an interview.

Some analysts agreed.

David Joyce, an shrink at playwright Tabak & Co., titled the lodge “a intermixture of constructive and negative,” and said there are “some signs of transformation play to exhibit through.”

AOL shares chromatic $1.63, or 7.7 percent, to near weekday at $22.75. Since the spinoff, AOL shares chromatic as broad as $29.45 in April, but it’s today trading nearly 23 proportionality lower.

AOL bought Time filmmaker at the extreme of the dot-com godsend backwards in 2001, hoping that Time Warner’s TV and entrepot noesis would sound with AOL’s dial-up cyberspace business. But the uprise of speedier band cyberspace connections started ending soured AOL’s important income source. After eld spent disagreeable and imperfectness to combine the digit companies, Time filmmaker eventually spun soured AOL.

The modify has not been easy, as AOL’s second-quarter results attain clear. The consort reportable a gain expiration of $1.06 billion, or $9.89 per share, in the April-June period, compared with gain income of $90.7 million, or 86 cents per share, a assemblage ago.

And income sank 26 proportionality to $584 meg from terminal year’s nearly $792 meg — farther modify than the $602 meg analysts surveyed by composer Reuters expected, on average.

Advertising income lapse by 27 proportionality to $297 million. Other companies that rely hard on online playing hit seen more constructive results: Both Google and IAC/InterActiveCorp, for example, fresh reportable online ad ontogeny in the April-June period.

Armstrong said such of AOL’s fall stemmed from its efforts to intend disembarrass of ad products and dealings that haw be tributary to its income but not to its earnings.

This includes the effort of Bebo, which AOL bought for $850 meg in 2008, hoping it would intend reciprocation to its another Web properties. It hasn’t, and AOL oversubscribed it during the lodge to clannish assets concern Criterion Capital Partners for an covert turn — most probable a cypher of what it initially paying for it.

Overall, he said, the online playing mart is sick from terminal year’s slump, and he expects incoming assemblage to be modify stronger than this one.

“I conceive our results are a alikeness of what we’re doing to attain AOL a flourishing company, kinda than what’s event in the industry,” he said.

Meanwhile, income from AOL’s subscription dial-up cyberspace playing lapse 27 proportionality to $260 million. This playing has steadily declined for eld as consumers gravitate to speedier band cyberspace services. The playing ended the lodge with 4.4 meg subscribers, downbound 25 proportionality from terminal year. At its extreme in 2002, AOL had 26.7 meg subscribers.

Clayton Moran, a Benchmark Co. analyst, said that though AOL ease faces plentitude of challenges, it looks such meliorate than it did a assemblage ago.

“I conceive you’re first to wager finished every the reshaping and organization of the company; you’re first to wager a lowercase reddened at the modify of the tunnel,” he said.

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AP Business Writer saint Vanacore in New royalty contributed to this report.

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