San Francisco: Digital media and entertainment company AOL Inc reported better-than-expected quarterly revenue, helped by a 60 percent jump in advertising revenue in its third-party platform.
AOL, whose shares were up nearly 4 percent in premarket trading, also said it approved a $150 million share buyback program.
Advertising has become a major revenue stream for AOL, the owner of the Huffington Post news website and the TechCrunch blog, especially as the company moves away from dial-up subscription service.
Advertising revenue increased 20 percent to $451.7 million, in the second quarter ended June 30, helped by the acquisition of video advertising platform Adap.tv and increased "programmatic" advertising.
Advertising revenue from AOL`s third party platform, which includes "programmatic" and advertising offerings to marketers and publishers, jumped to $194.3 million.
"Programmatic" advertising helps buy and sell online ad spots through bidding via computers, based on a set of pre-decided rules.
Total revenue rose 12 percent to $606.8 million from $541.3 million. Analysts on average had expected $595.5 million, according to Thomson Reuters I/B/E/S.
Net income attributable to AOL fell to $28.2 million, or 34 cents per share, for the second quarter ended June 30, from $28.5 million, or 35 cents per share, a year earlier.
Excluding items, it earned 45 cents per share, a cent more than analysts` average expectation.
Results were hit by a $7.4 million increase in amortization of intangible assets and another $7.2 million rise in stock-based compensation, AOL said.
AOL shares closed at $39 on the New York Stock Exchange on Tuesday. They have fallen 11.2 percent since the company announced disappointing first-quarter results in May.