AOL posts loss on Bebo charge, revenue drops

NEW YORK, USA: AOL Inc on Wednesday posted a major quarterly loss in the second quarter due to a goodwill impairment charge related to its sale of social networking site Bebo and a precipitous drop in advertising revenue.

The company warned in a regulatory filing that it expects total revenue and operating income to decline in the near term and foreseeable future as it continues to restructure its advertising business.

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Net loss during the quarter was $1.06 billion, or $9.89 a share, compared with a profit of $90.7 million, or 86 cents a share a year ago.

AOL recorded a goodwill impairment charge of $1.4 billion during the quarter following a goodwill impairment charge test. The company's net assets had increased due to a significant deferred tax asset following its sale of Bebo, which had coincided with a decline in its share price.

Revenue fell 26 per cent to $584.1 million as advertising declined on all fronts as did its subscription fees.

Advertising revenue declined 27 per cent to $260.2 million.

Analysts had on average been expecting revenue to come in around $610 million, according to Thomson Reuters I/B/E/S.