AOL Inc., the Internet company spun off from Time Warner Inc., said third-quarter profit more than doubled, bolstered by gains on asset sales, as search and display advertising sales continued to decline.
Net income climbed to $171.6 million, or $1.60 a share, from $74 million, or 70 cents, a year earlier, New York-based AOL said today in a statement. Sales fell 26 percent to $563.5 million.
Chief Executive Officer Tim Armstrong is trying to reignite ad sales growth with the acquisition of news blog TechCrunch Inc., a new search deal with Google Inc. and the creation of 500 local-news websites by year-end. U.S. display ads dropped 7.6 percent, matching the 8 percent decline estimated by John Blackledge, a Credit Suisse analyst.
Domestic display ad sales fell 6.7 percent in the second quarter after a 9.7 percent drop in the first quarter.
AOL dropped 23 cents to $25.29 yesterday in New York Stock Exchange composite trading. The shares had gained 8.6 percent this year before today.
The net income rose because of gains from the sales of investments in Kayak and ICQ, AOL said.
Last month, Yahoo! Inc. was working with Goldman Sachs Group Inc. to help defend against possible takeover approaches, people familiar with the matter said at the time. AOL had talked with private-equity funds including Silver Lake about a possible bid, said the people, who asked not to be identified because the talks were private.
The preliminary discussions between AOL and the private-equity firms focused on a possible purchase of parts of Yahoo, the people said then. Neither AOL nor the private-equity companies had made a proposal to Yahoo, they said.
In addition to TechCrunch, AOL also acquired 5Min Media, a network of online videos, and Things Lab Inc., a creator of social-networking tools, in a bid to restore lost relevance and revenue growth.
AOL signed a five-year search advertising deal with Google in September, expanding their partnership to mobile search and the placement of AOL videos on YouTube.