America Online Inc posted first-quarter results that actually showed a profit of $19.2m, or $0.16 per share, on revenue that rose 49% to $521.6m. Wall Street was expecting earnings of $0.12 and in reality that is what it got. The results were pumped up $0.04 per share by AOL’s sale of its roughly 19% stake in search engine company Excite Inc. In the corresponding quarter last year, the company reported a net loss of $350m, including a charge of $385m from the write-off of deferred subscriber acquisition costs. AOL had previously partly deferred its vast marketing costs, spreading them out over two years, but was forced to change its accounting process. The company says it added 821,000 subscribers during the quarter – up from 414,000 a year ago – to up its total to 9.4 million. marketing expenses were reduced to $97.8m, or 19% of revenue, down from $150.2m last year. The cash and short-term investment situation has improved by $54.3m to $228.9m, but alarmingly current assets continue to be dwarfed by current liabilities to the tune of $183m. The cash influx continues though, as AOL also announced Thursday that it pulled off another of its exclusive marketing deals, whereby unified messaging company JFax Communications Inc becomes the exclusive unified messaging service on AOL, offering its customers access to faxes and voice mail through their AOL accounts. This privilege, JFax will pay AOL at least $16m in staged payments, depending on revenues that the companies will share. In addition, AOL gets warrants for a 15% stake in JFax, 5% of which is dependent on how many customers JFax gets through the deal. The JFax service will begin its promotion on AOL early next year.
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