Time Warner's fourth-quarter financial results showed more pain for its struggling AOL unit.
AOL's quarterly revenue fell 23 percent from a year ago to US$968 million, Time Warner said Wednesday. AOL's ad revenue fell 18 percent and subscription revenue fell 27 percent from a year ago. AOL also had an operating loss of US$1.9 billion, largely due to a US$2.2 billion noncash charge related to the carrying value of goodwill. In a nutshell, AOL acquired a bunch of companies such as Bebo that aren't worth anything near what Time Warner paid for them.
For the full year, AOL revenue declined 20 percent to US$4.2 billion due to a decline in subscription and ad revenue. Subscription revenue fell 31 percent and ad revenue fell 6 percent.
By the metrics, AOL still has plenty of eyeballs, averaging 109 million average monthly unique users in the United States. And AOL still--can you believe it?--has 6.9 million people paying for online access.
As a combined entity, Time Warner reported a fourth-quarter net loss of US$16 billion, or US$4.47 a share, due to a bevy of writedowns on revenue of US$12.3 billion, down 3 percent from a year ago. If you exclude the kitchen sink of charges, Time Warner reported earnings of 23 cents a share. Wall Street was expecting earnings of 26 cents a share.
For the year, Time Warner reported a loss of US$13.4 billion on revenue of US$46.9 billion, up slightly from US$46.5 billion in 2007. In a statement, the company said it's pondering a reverse stock split.
For 2009, Time Warner said it expects adjusted earnings to be flat compared with earnings of 66 cents a share in 2008.
This article was first published as a blog post on CNET News.