Is AOL Dying? Stock Hits 12 Month Low Amid Fears Of Poor Growth Figures
Before the likes of Google and Facebook started to dominate, companies like AOL defined the web. AOL was not only one of the early ISPs, it was a cornerstone of many of the webs defining services, like chat.
Today AOL is a shadow of its former self and things just got a little bit worse. According to media reports, AOL stock tumbled to a 52 week low, bottoming out at $17.62—a 4% drop on the day. According to tech and stock pundits, the firing of AOL’s ad boss, Jeff Levick, perhaps caused a mass panic among institutional buyers.
But a declining stock in the tech sector, especially for a big company like AOL is no small issue. Google, Apple and other tech giants have seen marked growth in their market cap in the last few months, and this is largely a reflection of a bullish investor sentiment. Simply put, if AOL is doing badly right now, their problems are clearly structural and need sorting out.
AOL is invested heavily in acquisitions across many sectors, but its biggest cash cow is display advertising—a sector which it has seen grown somewhat within the last couple of quarters. What’s needed is better than average growth or else AOL will soon have to start issuing profit warnings. Investors at the moment seem to be keen on investing in companies that are coming out with something new, so if AOL wants to stay solvent it had better put its thinking cap on.
Watch the video below to see how AOL has changed over the years.
(Source: sitetrail.com)
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