Newspaper article THE JOURNAL RECORD

AOL Foresees Financial Data Following Seasonal Trends

Newspaper article THE JOURNAL RECORD

AOL Foresees Financial Data Following Seasonal Trends

Article excerpt

WASHINGTON (Bloomberg) -- America Online Inc., in another sign that the company's rapid growth is tapering off, said its future financial results may follow seasonal patterns.

The Dulles, Va., company said that the number of people who sign up for its online services may be highest during the holiday season. Conversely, the time these subscribers spend on-line could decrease during the summer, the company said in a regulatory filing.

Online subscriptions and usage directly affect AOL's revenue and earnings. However, the company's phenomenal growth -- from 1 million subscribers to 7 million during the past two years -- may have masked seasonal fluctuations in its past financial performance. America Online has seen this growth slow recently as the company experienced more competition from the Internet and rivals such as Microsoft Corp. Last month, the company sought to retain customers by establishing a flat rate of $19.95 per month for unlimited use of its on-line services. While the new pricing plan could cut revenue generated by subscribers, AOL hopes to make up the difference with services such as advertising sales. And, as in the television business, the seasonal patterns that emerge in subscription numbers and usage may be crucial to the advertising plans. "There is a growing consensus that there is seasonality in this business," said Neeraj Vohra, a technology analyst at Wheat First Butcher Singer of Richmond, Va. "Other players are seeing it too." For AOL, April marked the first time that the company began to see the effects of seasonality in the number of new subscribers and the amount of time people spent on-line, according to a quarterly report filed earlier this month with the Securities and Exchange Commission. The company said in the filing that it expects seasonality "will have an effect in the future. …

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