NEW YORK: AOL shares rose sharply on Wall Street on Wednesday as the Internet company posted a quarterly net loss but increased display advertising revenue for the third quarter in a row.
Shares were up more than 10 percent at $14.69 in early trading.
The company reported a net loss of $2.6 million in the third quarter compared to a net profit of $171.6 million in the same quarter a year ago, which included a big gain from the sale of instant messaging service ICQ.
Revenue was down six percent at $531.7 million but came in slightly better than expected by Wall Street analysts.
AOL's overall advertising revenue rose eight percent to $317.7 million.
Revenue from display advertising, which includes banners, rich media and video and commands higher prices, increased 15 percent to $136.7 million.
According to eMarketer, AOL's share of the $12.33 billion US display ad market will fall to 4.2 percent this year from 4.8 percent in 2010.
The company's share of overall US online ad revenue will decline to 2.7 percent this year, down from 3.4 percent last year, eMarketer said.
Subscription revenue from AOL's steadily shrinking dial-up Internet access service dropped 22 percent in the third quarter to $191.9 million.
Traffic to AOL properties rose only one percent during the quarter despite the acquisitions over the past year of technology blog TechCrunch and news and opinion site The Huffington Post.
AOL said its properties had an average 107 million monthly unique visitors during the quarter, compared to 106 million during the same quarter a year ago.
AOL bought The Huffington Post in March for $315 million and TechCrunch in September of last year.
Chairman and chief executive Tim Armstrong, who was brought in from Google two years ago to execute a turnaround, said AOL continued to make progress in the quarter and was on the path to eventual profit growth.
Formerly known as America Online, AOL fused with news and entertainment giant Time Warner in 2001 at the height of the dotcom boom in what is seen as one of the most disastrous mergers ever.
It was spun off by Time Warner in December 2009 into an independent company.
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