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AOL Posts Nice Ad Gains but Hemorrhages Subscribers

The good news is that AOL reported it grew its non-search advertising business to $313 million, a 53 percent increase over the same quarter a year ago. It reported ad sales of greater than $1 billion for all of 2004. Advertising.com, its recent acquisition, threw $97 million into the annual revenues bin. Search, thanks to the relationship with Google, won $302 million in revenue, an increase of 51 percent and accounting for roughly a third of ad sales. The bad news is that it lost 464,000 subscribers in the fourth quarter - roughly 60 percent the population of San Francisco - and a rate that would reduce the internet service to zero members in about nine years. In October of 2003, MarketingVOX extrapolated subscriber losses to peg a demise date of 2013, which was then confirmed by calculations made last March on current data showing a shuttering in 2014. But this trend has been slowed somewhat, putting the denouement off an additional two years at the current rate.

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