November 29, 2021

AOL Profit Rises on Strong Ad Sales

AOL reported its best quarterly revenue growth in eight years because of strong search and advertising sales, and its shares rose sharply.

The company said Friday that total revenue rose 4 percent to nearly $600 million in the fourth quarter, beating analysts’ estimates of $573.7 million, according to Thomson Reuters.

Advertising revenue, an important measurement for the company as it moves away from subscription-based dial-up services and emphasizes its media properties like The Huffington Post and Patch, rose 13 percent to $410.6 million.

It was advertising sold through AOL’s third-party network that helped lift overall revenue. Revenue jumped 37 percent to $183.5 million at AOL Networks, a market to sell inventory on behalf of publishers.

Net income rose to $35.7 million, or 41 cents per share, in the fourth quarter from $22.8 million, or 23 cents per share, a year earlier. Earnings per share were in line with analysts’ estimates.

While advertising sales represent AOL’s future growth, the subscription unit, which is now called the membership group and includes the legacy dial-up service, is still providing the bulk of profit.

Excluding special items, operating income before depreciation and amortization for the membership group was $158.7 million for the quarter, representing the vast majority of the total.

“It’s not great to see so much of the bottom-line contribution coming from the revenue segment in decline,” said Ken Sen, an analyst at Evercore. Mr. Sena said the company has made “steady progress” over the past two years, but “still has a ways to go.”

AOL’s board also authorized the repurchase of $100 million in stock.

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Preoccupations: Don’t Fret. Just Ask for What You Need.

“YOU can’t be afraid to ask,” my Uncle Art used to say when recounting tales of his successful 40-odd-year career selling mattresses up and down the Eastern Seaboard.

My uncle was talking about making the sale, but corporate types need to ask for what they need, too. This is especially true for women, who, in spite of an increase in diversity training, mentoring and sponsorship programs, still lag far behind men in reaching senior management and C-suite positions. In fact, in 2010, only 14.4 percent of the executive officer positions at Fortune 500 companies were held by women.

Whether from fear of being perceived as too aggressive or too selfish, women tend not to be comfortable asking for what they want. And when they do ask, it can be in ineffective ways.

Often, women’s speech is peppered with tentative and indirect phrases that scream a lack of confidence, such as, “I’m not really sure, but you could try it this way,” or, “Now, I’m not an expert, but …” or, “I think this is a good idea — do you?”

Many women have also adopted an upward vocal inflection at the end of sentences, a regrettable characteristic popularized by the Valley Girl. It turns a strong declarative statement into a question, conveying weakness, uncertainty and a request for approval.

In addition, and perhaps most important, professional women sometimes forget to build their case around the things that matter most to their employer — principally, the impact on the bottom line. That was true for one high-producing client of mine, who needed a more flexible schedule that would allow her to work from home one day a week.

While she knew she could make the change work seamlessly for her clients and her direct reports, she was still very reluctant to ask. She worried that her boss would demote her to part time and cut her salary.

After addressing her fears of the possible consequences, we went to work on perfecting her “ask.” We prepared a brief, clear account of why she needed to make this change and described how she could do her job without harming clients, colleagues or the bottom line.

The dreaded conversation with the boss lasted exactly 10 minutes. It was cut short the moment he told her: “I have no doubt we can make this work. In fact, if you should need to work another day at home, just let me know, and we’ll see how we can manage it.”

It just goes to show you: you’ve got to ask.

Another client, a managing director of an international investment bank, says women need to be bold and straightforward when stating what they need to achieve their goals.

“My 25-year career path has included several job changes,” she said. “And with each new job, there was always a male colleague who was responsible for introducing me around the firm. In every case, my cordial host would introduce me almost exclusively to women. I know they thought they were helping me, but, in fact, it was the introductions to the men I couldn’t manage on my own.”

She was quick to add that the “women only” introductions had nothing to do with trying to undermine her success. The men had simply assumed that she’d be more comfortable with other women.

But how will a business see a return on investment if women cultivate relationships only with other women? The answer is: It won’t.

From her previous experiences, my client had learned to ask for the help she needed. A few years back, when male colleagues welcomed her into the company with an offhanded yet well-meaning “Let me know if I can do anything for you,” my client knew exactly how to respond:

Introduce me to the top 10 people in the firm. Include me when you and the guys go out for dinner. Arrange a breakfast with the firm’s top traders, and let me introduce myself and my team. Count me in when the firm signs up for any corporate sponsorships. Invite me to your quarterly top-client events.

In addition to these requests, my client had the courage — some might call it the chutzpah — to schedule an appointment with the chief executive and tell him what kind of support she was seeking. When colleagues asked why she had gone to see the C.E.O., she told them: “The firm’s paying me a lot of money to do a great job. What C.E.O. wouldn’t want to help me do that?”

THE act of putting your stake in the ground — stating exactly what you want — is scary for most women. We worry that if we’re too direct, we’ll alienate the very audience we’re trying to win over.

Unfortunately, in the corporate world there is a narrower band of acceptable communication for women than for men. Even so, we can find ways to ask for what we need. Unfair as it may seem, women do have to be more attuned to the listener and more careful in determining the best way to say what needs to be said. But look on the bright side: for a gender with a propensity for zeroing in on the feelings of others, we’ve got a head start.

Peggy Klaus consults with executives and organizations on leadership and communication. E-mail:

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For a Few Developers, It’s Hammer Time

Five months later, when not a single one of his 12 condos had sold, he decided it was time for drastic measures. He would break his long-held vow and follow his bank’s advice. He would try an auction.

“It’s not an easy decision,” said Mr. Foundos, the managing partner of FFS Realty of East Meadow, N.Y. “No one likes to roll the dice when you don’t know where they’ll go.”

Last weekend Mr. Foundos’s building, the Winfield, went on the block. The four units without a reserve price were sold. Opening bids started as low as $149,000, or 60 percent off the previous asking price.

“We needed a kick-start, and the auction provided that,” he said. “It was kind of what I expected — getting people through the building was good, and it got good exposure.”

With few sales, developers like Mr. Foundos, tired of seeing loan payments, taxes and maintenance costs consume the bottom line, are resorting to auctions, in a gamble that selling units at a discount now will be better than sitting on unsold property for another year. In some cases they are trying to sell a building’s last remaining units; in others, to prod moribund sales or introduce a property.

Since the housing downturn, condo auctions around the country have increased. But in New York City they have been rare; and in Manhattan, nearly nonexistent.

Brokers and lawyers, sensing that the time may be right for residential auctions in New York, have started auction companies, like and Paramount Realty USA, in the last two years. Established auctioneers, like Sheldon Good Company and, have opened offices in Manhattan in expectation of a boom.

Yet, for all the interest, fewer than 10 live, in-person auctions have taken place in New York City since the housing bubble burst three years ago. Only about 75 units have changed hands in this way.

“What drives this business is a significant fall in housing prices,” said Ken Rivkin, an executive vice president of, “and we have not had that in Manhattan.”

According to some predictions, the housing bust was going to create a wave of auctions across the country. But despite an uptick, auctions represent less than 2 percent of the overall residential real estate market nationwide. In 2008, the most recent year for which data are available, $17.1 billion in residential real estate sold at auction, or 1.4 percent of all homes sold, according to the National Auctioneers Association. That figure was $11.5 billion in 2003 and $16 billion in 2006.

The majority of homes put up for auction in New York are foreclosures sold in city courthouses or through, formerly the Real Estate Disposition Corporation. Foreclosure auctions disposed of 6,621 apartments, single- and two-family homes last year in New York City, according to (Most auction houses avoid foreclosed properties because they don’t want the accompanying hassles and uncertainty.)

In the past, developers and individual homeowners were loath to auction properties because of the air of desperation associated with the process. Most have been content to list their homes through a traditional brokerage or to wait for the market to recover. Auction houses report that they have come close to signing deals with developers, only to have them back out the minute they sell a few units.

“What it takes to be a good developer is to be a perpetual optimist,” said John J. Cuticelli Jr., the chief executive of the Sheldon Good Company auction house in Manhattan. “What he doesn’t realize when you have 100 to 150 units to consume, three or five isn’t a velocity of sales to sustain any business model. There’s this continual hope that the market will come back.”

Some developers have had problems selling condominiums because of new Federal Housing Administration rules. The agency will not insure a mortgage unless 30 percent of the units in the building have been sold. Banks, too, have tightened their financing demands and generally will not lend unless 30 to 50 percent of a building is sold.

“That’s a Catch-22 for a seller,” Scott Burman, a developer and a founder of Paramount USA, which auctioned the Winfield condos. “Buyers need mortgages, banks need contracts. Unless you can line up all-cash buyers, it’s very difficult to do.”

Because of the relative strength of the New York market, banks here have not been pushing developers to hold auctions as they have in other parts of the country. The average price for a Manhattan apartment is 22.7 percent less than in 2008, according to the real estate appraisal company Miller Samuel.

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You’re the Boss: Not All Fixed Costs Are Truly Fixed

Thinking Entrepreneur

There are variable costs that go up and down with volume, and there are fixed costs that don’t change. It is a pretty simple concept, and one that is important for business owners to understand if they are going to make intelligent pricing and budgeting decisions.

But even fixed costs aren’t necessarily fixed forever. In fact, if reviewed carefully, they can be a treasure trove of new profit. Benjamin Franklin liked to say that a penny saved is a penny earned. I’m guessing that many business owners could save a lot more than pennies on their fixed costs, and those savings — potentially tens of thousands of dollars — fall right to the bottom line.

While this has always been true, it is even more true today with recent changes in technology and the current economic slow down (if your business has fully rebounded, more power to you). Here are some things I have done recently that I believe have saved or will save significant dollars:

Switching light bulbs. Actually, the people in the trade now call them “lamps.” I have no idea why they call them lamps, but why spoil their fun?

I have about 500 65-watt halogen lamps, each of which use about $35 a year in electricity. That is about $18,000 per year, or half of my electricity bill. There are new LED lamps that cost only about $6 per year. For me, that is a savings of about $15,000 per year in electricity, not including the savings in air conditioning that will result because the lamps are much cooler. But, yes, there is a catch.

The bulbs cost about $50,000, including sales tax. The electric company has a rebate of $10 per unit, which brings the investment down to $45,000. But the bulbs last 50,000 hours, which is 15 years in this case. (Because of the scale of my project, I have done a good amount of research and have found there are different qualities of lamps, and some are not very good. There is also a big variance in the quality of the light.)

By contrast, the Halogens last 3,000 hours, or about a year. What does it cost to change 500 bulbs a year? Maybe $10 each with labor. That is another $5,000 per year in savings. There are also some tax savings because you can deduct the cost of the lamps this year. (Talk to your accountant) Add it all up and it means a payback of less than two years. From then on for the next 13 years: ka-ching! (I grew up using an old cash register.)

How much business do you have to do to net another $20,000 per year, every year? What’s more, these are green savings, which are always better. One of my key people brought up the fact that the prices are sure to fall, as they do for any new technology. I’m sure he is right, but I did the math. Every month I wait for the price to drop, I will lose about 3 percent of the price of the lamp in electricity charges. The price of the new lamps are not going to drop that fast.

There have also been advances in fluorescent lighting with electronic ballasts and high output lamps. If you are still using the same standard lamps (T12’s) that have been around for many years, you are going to have a problem finding them and the ballasts because they are being discontinued. Fixtures can be retrofitted to accept the new thinner T8’s with electronic ballasts. There are also companies out there who will bid for your electric business, which could save you even more.

Switching telephone technologies. I have five different businesses, all with different phone and fax lines. I never paid that much attention because it was a fixed cost. But that was old-school thinking. New school, we have begun looking into VoIP, voice over Internet protocol. We will probably save another $10,000 to $20,000 per year. We don’t have this one figured out yet, so please chime in if you have suggestions.

Switching locations. I’ve written about it before, but it bears repeating. Real estate costs have dropped dramatically over the last three years. Have you checked out the market? I have significantly reduced my warehouse/factory cost, and I have better space.

Many businesses have gotten leaner over the last several years and have gotten hungrier for new business. We have gone through every fixed and variable cost to be sure that we are taking advantage of the new climate. I guess you could call that making lemonade out of lemons.

The bottom line, literally, is that profit is revenue minus expenses. Most entrepreneurs spend their time chasing new business. It is equally effective to chase expenses. Have you had any savings breakthroughs?

Please tell us!

Jay Goltz owns five small businesses in Chicago.

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