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AOL: Getting Worse Before It Gets Better

It's conceivable that AOL will one day be a profitable business -- just don't expect that day to come anytime soon. No, due to continued weakness in search and contextual advertising, AOL said in 10-K filing released this week that it expects ad revenues on its own properties, as well as its third-party networks to "decline significantly."

As PaidContent notes: "The hope has been that its string of acquisitions -- most recently and notably the $315 million it paid for The Huffington Post -- will help turn things around at some point this year." Arguably, AOL's problem is just how much it still depends on subscription revenue.

In 2010, 53% of the company's revenue came from advertising, compared to 54% the year before. Meanwhile, subscription dollars made up 42% of AOL's total revenues in 2010, while 5% came from "other," which includes fees related to mobile e-mail and instant messaging and licensing of Mapquest.

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