Is AOL, Inc. (AOL) Set For a Journey of Growth?

Things were looking bleak for Yahoo! Inc. (NASDAQ:YHOO) before the new CEO Marissa Mayer took charge of its operations. Her insistence for better user experience led to number of changes in Yahoo! products like Yahoo! mail, Yahoo! search, etc. It is expected that under the guidance of Marissa Mayer, who was formerly a VP at Google, Yahoo! will gradually pick up market share, which it has been losing to other stronger players, including Google. In February, Yahoo!’s share price hit a new 52-week high, and analysts are expecting that it will continue to rise as a result of efficient management and product innovation.

The Bottom Line

I began this article by mentioning the big news for AOL. Though there are certain grey areas when we carefully analyze the performance metrics yet, these results hide it very well. Going by what the top management of the company said, AOL is back on the growth track and is poised to grow in the coming years on the back of increasing revenue from search and display advertising, as well as ad platforms like Devil. AOL CEO Tim Armstrong also admitted that Patch fell behind projections and promised to make efforts in bringing Patch towards profitability.

HuffPost Live is an excellent example of AOL’s efforts on the product innovation front. To quote a couple of numbers from the earnings call, HuffPost Live garnered around 128 million video views in just six months, and was also named the Biggest Innovation in Media for the year 2012 by Mashable. AOL is moving forward on strong fundamentals of audience and revenue growth, a vigilant cost management system, and product innovation.  All in all, AOL deserves to be included in your portfolio at its current price.

The article Is AOL Set For a Journey of Growth? originally appeared on Fool.com and is written by Mihir Mehta.

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