AOL: It's Hip To Be Square Again

AOL has been synonymous with "get off my lawn, you young whippersnappers" for quite some time. Their massive revenue stream of dialup subscription money finally dried up completely a couple of years ago, and they desperately needed to find some other reason for people to look at their pages. They seem to have managed it the old-fashioned way; they're offering compelling content and drawing unique visitors. Now for the tricky bit; making it pay in ad revenue.

Traffic to the sites -- including AOL Money & Finance, entertainment, and the male-oriented Asylum -- grew 15% to 56.5 million unique U.S. visitors in the first quarter from a year ago, according to comScore Media Metrix. Measured by traffic, some of the sites even top the charts for their categories.

AOL still hasn't translated the surge in visits into higher ad revenue. But the news is positive for the Time Warner Inc. unit, which has struggled with another initiative -- building AOL into a major digital ad-sales firm. When Time Warner reports earnings next week, AOL is expected to post a weak first quarter, with ad revenue that is flat to slightly down.

It wasn't a booming quarter in general for advertising on the Internet, so running in place might be considered a win for AOL. Eventually, if you offer good content on the web, the advertising dollars follow you. Maybe someday it will even be more profitable than AOL's old business model of selling screaming modem noise by the month.