AOL Time Warner has admitted that revenues at its AOL division will be flat next year following a decline in high-margin ads and commerce.
The company said that growth in AOL's worldwide subscriptions will be offset by declines of 40 to 50 per cent in advertising and commerce revenues in 2003, "largely due to lower revenue recognition from prior-period commitments".
AOL's 2003 earnings before interest, taxes, depreciation and amortization (Ebitda) are expected to decrease 15 to 25 per cent year over year.
Wayne Pace, chief financial officer at AOL Time Warner, said: "It is clear that 2003 will be a transition year, but with this plan we expect AOL once again to deliver solid Ebitda growth beginning in 2004."
AOL also plans to make itself into a shopping destination rather than turning users to other websites, including setting up an online liquidation or bargain store to compete with other web retailers.
The company said that it wants to launch services in areas such as classifieds, personal finance, gifts and real estate.
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