4 ms·

Morbid thought of the day - I wonder how many of those people have died of old age and their accounts are still setup to autopay AOL?

cosmie 11y ago
That's probably not that common. Much of their membership attrition likely comes from the inverse of that: people passing away and as their estate is wound down their account will be shut down. What's fascinating is that Verizon purchased AOL for $4.4B this year. With AOL's publishing business only raking in ~$10mm per year, I'm really curious how they valued the dialup business. Did they just straightline membership attrition percentage and assume it'll decrease steadily? Or did they do an in-depth analysis of members ages and life expectancy and assumed lifetime membership to calculate a more granular remaining CLV? Now that's a morbid thought...
- potatosareok2 11y ago
  Where do you get $10m a year? Quarterly earnings report have much higher numbers...http://ir.aol.com/phoenix.zhtml?c=147895&p=quarterlyearnings http://ir.aol.com/phoenix.zhtml?c=147895&p=quarterlyearnings Beyond that I think Verizon bought AOL 1) for a company with some experience with digital advertising, which is where I think Verizon sees a lot of its growth potential. There's only so many mobile phone subscribers in the US and landline business isn't really growing too much. See its accquistion of the TV company from Intel (they spent $1 billion for a NFL contract to stream games on mobile for 4 years). 2) it's still profitable and $4 billion really isn't very much for Verizon (Verizon itself was the $130B buyout of the Vodafone share by Verizon communications)
  - cosmie 11y ago
    Thanks for catching that. You're correct that overall revenue is much higher, but the cost of traffic acquisition eats into that significantly. It's actually Adjusted OIBDA that's $10mm for the Brands group, which is arguably a more accurate figure to reflect the value of the division. Check out the table on page two of the 2015 earnings report at your link for the full breakdown.

cosmie 11y ago

That's probably not that common. Much of their membership attrition likely comes from the inverse of that: people passing away and as their estate is wound down their account will be shut down. What's fascinating is that Verizon purchased AOL for $4.4B this year. With AOL's publishing business only raking in ~$10mm per year, I'm really curious how they valued the dialup business. Did they just straightline membership attrition percentage and assume it'll decrease steadily? Or did they do an in-depth analysis of members ages and life expectancy and assumed lifetime membership to calculate a more granular remaining CLV? Now that's a morbid thought...

potatosareok2 11y ago
Where do you get $10m a year? Quarterly earnings report have much higher numbers...http://ir.aol.com/phoenix.zhtml?c=147895&p=quarterlyearnings http://ir.aol.com/phoenix.zhtml?c=147895&p=quarterlyearnings Beyond that I think Verizon bought AOL 1) for a company with some experience with digital advertising, which is where I think Verizon sees a lot of its growth potential. There's only so many mobile phone subscribers in the US and landline business isn't really growing too much. See its accquistion of the TV company from Intel (they spent $1 billion for a NFL contract to stream games on mobile for 4 years). 2) it's still profitable and $4 billion really isn't very much for Verizon (Verizon itself was the $130B buyout of the Vodafone share by Verizon communications)
- cosmie 11y ago
  Thanks for catching that. You're correct that overall revenue is much higher, but the cost of traffic acquisition eats into that significantly. It's actually Adjusted OIBDA that's $10mm for the Brands group, which is arguably a more accurate figure to reflect the value of the division. Check out the table on page two of the 2015 earnings report at your link for the full breakdown.