Former giant AOL left reeling by income drop

Oliver Smith
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MEDIA firm AOL was rocked yesterday as its shares dived 20.6 per cent to $34.85, punished by investors after income fell 64 per cent to $9.3m (£5.5m) in the first quarter.

The media and entertainment company said revenue from ads bought and sold on its electronic exchange soared 55 per cent to almost $187m, with total revenues reaching $583.3m, but this was not enough to rescue its share price.

Advertising has become a crucial revenue stream for AOL, and its growth is now critical to the firm’s overall performance, as revenue from its dial-up internet dries up.

The company, which owns the Huffington Post and the TechCrunch blog, has been investing in advertising as a priority of chief executive Tim Armstrong.