AOL UK is the first standalone AOL service outside of the US to be EBITDA-positive (earnings before interest etc), according to a briefing yesterday about the future for AOL. AOL Europe - made up primarily of the UK, France and Germany - is expected to generate around $1.2bn in revenues this year - almost double what it made two years ago.
AOL UK"s slice of that revenue runs in at 42 per cent, which gives the ISP annual revenues of around $500m (£320m). The presentation also revealed that advertising revenues made up less than 10 per cent of AOL Europe"s revenue.
Focusing on the UK, AOL reports that it has more than two million paying subscribers, compared to less than a million for its rival Freeserve. However, while it claims it has made good progress in narrowband, AOL UK sees broadband as a priority. It also makes clear that one of its challenges in the progress of cable companies in delivering competitively priced broadband products. Today"s announcement that AOL UK is to team up with cableco NTL to deliver a broadband service appears to show that it is trying to gain access to cable networks.
Another challenge it cites is the continued dominance of BT in the broadband marketplace. At the end of September AOL Europe had 6.1m subscribers