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4 December 2002

AOL Revenues In Decline

AOL shares fell by 14 percent and had a significant impact on other tech stocks today in response to disappointing 2003 revenue forecasting announced by AOL Time Warner executives at an analysts meeting in New York.

While it is expected America Online's 2002 revenues will exceed USD 8.8 billion and advertising and commerce revenues to be between USD 1.5 billion and 1.6 billion, the 2003 outlook is bleaker. The Company said that solid growth in worldwide subscription revenue will be offset by declines in advertising and commerce revenues of 40 to 50 percent in 2003, with overall revenues for the division essentially flat in 2003 compared with 2002.

During the meeting, AOL Online Chief Executive Jonathan Miller also hinted at possible price increases for AOL subscribers in 2003. With the dial-up ISP market becoming saturated in the U.S. and main rivals MSN and Yahoo competing for AOL's current market share, AOL is starting to experiencing declining subscriber growth.

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