America Online (AOL) beat analysts? expectations for its second fiscal quarter on Wednesday and announced its third stock split in less than a year.
The online services supplier saw revenues increase 62 per cent to $960 million, while underlying profits soared 340 per cent to $88 million or $0.17 per share - $0.03 above the First Call consensus estimate. However, because of a former tax provision, the actual profit figure rose to $121 million.
But the results do not yet take into account AOL?s proposed acquisition of Netscape, whereby AOL and Sun will collaborate on ecommerce products and services as part of the deal.
Steve Case, AOL?s chairman and chief executive, said he anticipated current strong growth levels to continue into the future. "With Netscape and Sun, we will be able to offer complete turnkey ecommerce solutions," he boasted.
Bob Pittman, AOL?s president and chief operating officer, also claimed that the firm added 1.6 million new subscribers to its online service over the quarter, bringing the total to 17 million. Its customer base outside the US now exceeds three million.
He added that the company?s multibrand strategy was paying off, with both its CompuServe Internet service and its recently acquired ICQ online community posting strong usage growth. ICQ now has more than 25 million members, Pittman claimed.
Data from Media Metrix also suggests that AOL?s Web portal AOL.com saw 28 million unique visitors during December, beating Yahoo, Geocities and Microsoft?s MSN.
In a thinly veiled reference to broadband Internet provider @Home?s proposed purchase of Web portal supplier, Excite, Case said that many companies were "seeking to look more like AOL."
He predicted that other vendors would follow suit in the acquisition spree, leading to a " major year of consolidations" in 1999.
And analysts were hard pressed to detect a cloud on AOL?s horizon.
Barry Parr, IDC?s director of Internet and ecommerce strategy, said: "You could argue that AOL doesn?t really have any competitors right now. No one does what they do."
He also saw the rumoured combination of AT&T?s WorldNet service with @Home and Excite as posing little threat to AOL?s dominance. "AT&T and @Home together have less than 2 million consumer customers," he said.
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