AOL Inc: To Buy or Not to Buy

AOL Inc. (NYSE:AOL) shares are almost back above $26, so is now the time to buy, or do you wait? 

(SpokesmanReview.com | Universal Press Syndicate ) AOL stock might be a buy, but wait

Those who remember the old ticker symbol aren't dreaming. AOL (NYSE: AOL) is back, now that Time Warner has spun off its problematic online arm.

The stock didn't surge upon launch. Since Time Warner is distributing the shares to its investors, it's understandable if many of them choose to cash out and treat the sale as a holiday dividend.

AOL has a lot to prove before it begins heading higher. Sure, it hired key executives from ("Motley Fool Rule Breakers" pick) Google and Yahoo to regain some dot-com sizzle, but it's still a mess.

Revenue and operating profits fell by 23 percent and 50 percent, respectively, in AOL's latest quarter. It shed 2.1 million subscribers and now has just 5.4 million. (It had 26.7 million in 2002.)

AOL has been focusing lately on ad-supported revenue. Unfortunately, ad revenue has taken a 22 percent hit over the past year. Even the display-advertising laggards are holding up better. Yahoo and IAC's media and advertising revenue fell by 8 percent and 12 percent, respectively, during the same quarter.

Daring investors might keep an eye on AOL over the coming months. Once the Time Warner shareholders throw in the towel, there may be value remaining for a collection of online properties that still serve up a ton of page views and can be monetized more effectively.

SOURCE: http://spokesmanreview.com/mobile/story.asp?ID=317463