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Wednesday, 31 January, 2001, 23:10 GMT
AOL surfs past 26m subscribers
Actor George Clooney
George Clooney in The Perfect Storm, a box office hit last year
The world's largest internet service provider has reported subscriber numbers rising by 23,000 a day, and advertising revenues up by almost three quarters, in a boost to a sector reeling from cutbacks.

Our company will focus on joining the dots in this new, converged world

Steve Case, chairman, AOL Time Warner

Growth of 2.1 million surfers in the last three months of 2000 has brought America Online's total subscriber roll to 26.7 million, with takings from advertising and e-commerce climbing to $686m (469m).

Spending of $4.6bn (3.15) by online shoppers over the Christmas period brought the total etail outgoings for last year to $20bn, double the amount for 1999.

The figures, revealed in the first profits statement since AOL merged with media giant Time Warner, follow a troubled period for the sector, with Disney, News Corporation and the New York Times among firms which have announced cuts to jobs or sites this month.

AOL Time Warner, which three weeks ago gained final regulatory approval for the merger, is itself axing about 2,400 jobs from its empire, which encompasses a cable network, film company and music arm besides the internet business.

'Joining the dots'

Combined earnings, before adjustment for tax and other standard charges, hit $2.4bn between October and December, 14% higher than in the same period the year before.

And Jerry Levin, chief executive, said the implementation of the merger would encourage further growth.

"AOL Time Warner's current businesses... will benefit from the cross-company initiatives and transformational opportunities already underway," he said.

Steve Case, chairman, said the firm's role now is to "focus on connecting the dots" in a media sector being transformed by the growth of the internet.

Films arm struggles

The number of AOL subscriber outside the US has passed the 5 million mark, 1.4m of them in Europe, Wednesday's statement revealed.
Madonna at the 2000 MTV Europe Music Awards in Stockholm
Madonna: On the AOL Time Warner payroll

But the bouyancy of the new media operations contrasted with soft trade in much of AOL Time Warner's traditional business.

Profits at the film division fell 16% to 183m for the quarter, despite a strong performance by The Perfect Storm, which has taken 327m at the box office to date.

The company is shaking up its New Line studios, makers of the "underperforming" film Little Nicky.

Revenues at the music arm, which has artists such as Madonna, Cher and The Corrs on its books, were "essentially flat", with profits declining 10% to $178m over the three months.

Revenues at AOL Time Warner's cable division rose 13% to $1.6bn in the quarter, and rose 4% to $1.8bn at the Networks subsidiary.

Advertising deal

For the AOL Time Warner businesses as a whole, advertising rose 24% to more than $8.7bn, with cross-media deals with Nortel Networks, Cendent and Compaq set to boost takings this year.

Shares in AOL Time Warner ended the day $1.75 lower, at $52.56 on the New York Stock Exchange.

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See also:

18 Jan 01 | Business
CNN to axe 400 jobs
24 Jan 01 | Business
AOL Time Warner sheds more jobs
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