Dial-up is still the main revenue source for AOL

Technology -

AOL's dial-up Internet division still brings in the majority of the company's revenue, the latest numbers show.

Circa News
Source: en.wikipedia.org
Source: en.wikipedia.org

On Feb. 8, AOL released its results for the fourth quarter of 2012 and reported revenue growth for the first time in 8 years. Breaking down the company's numbers reveals that its Membership Group -- the division that includes its dial-up Internet business -- still generates most of the company's revenue.

The Membership Group (which includes every membership service the company operates, including dial-up, premium support, and Mail) generated $230.8 million in Q4 2012, followed by its Brand Group (which includes properties like TechCrunch and Engadget) at $213.2 million.

The company still has 2.8 million dial-up subscribers as of the fourth quarter of 2012. Critics say that AOL's dependence upon such legacy revenue could threaten its future. AOL said the number of dial-up subscribers fell by 15% in the past year but that dropoff was less severe than in previous quarters.

"AOL will have a built-in marketing engine (content and ad network) with which it can market subscriptions at very low cost. And given the profitability of this business, AOL's profit could suddenly begin to grow very rapidly." Henry Blodget, Editor of Business Insider

Blodget suggests that AOL's dial-up business could be used to subsidize the expansion of other areas, such as advertising and original content.

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