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Thursday, 20 July, 2000, 21:21 GMT 22:21 UK
AOL's billion dollar profits

America Online, the world's richest internet company, beat analysts' expectations when it announced profits of more than $1.2bn in its financial year which ended on 30 June.

The company had sales of $6.8bn for the year, the bulk of which came from the subscriptions paid by its members, who are mainly in the United States.

Steve Case: billion dollar ma
Steve Case: billion dollar man
AOL added 900,000 more subscribers in the year's last quarter, bringing its total membership to 23.2m.

But what encouraged analysts most was the rapid growth of its revenues from e-commerce and advertising, which grew by 95% in the quarter to $609m. It now makes up one-third of the company's revenues, which totalled $1.9bn for the quarter, a 39% increase on the previous year.

The company's profits doubled to $333m, or 13 cents per share, above estimates of 11 cents per share.

AOL also announced a major alliance with financial services company Citigroup to access an individual's financial data on the web and make payments easier.

Threat to merger plans

In January, AOL announced plans to merge with media giant Time Warner, in what was the world's largest takeover.

Although the company says it will complete that deal by the end of the year, concerns are growing that regulators might want to step in and examine the implications for competition.

Time Warner's rival Disney is reported to be urging the US government to insist that the merged company divest itself of all its cable TV business as a condition of the deal.

Time Warner has one of the biggest cable networks in the US, and access to its high-speed, broadband cable connections was seen one of the key reasons for the merger deal.

But Disney was angered by an attempt earlier in the year to exclude its networks from Time Warner cable systems in New York.

Disney said it was concerned that the merged company could dominate the market for interactive television.

But Time Warner spokesman Ed Adler called the Disney proposal "absurd" and said there was "no basis for any conditions on the merger.

Ironically, AOL was itself urging open access to cable systems before its acquisition of Time Warner, when it was concerned that AT&T high-speed networks might exclude it from future broadband services.

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10 Jan 00 | Business
AOL, Time Warner confirm merger
11 Jan 00 | Business
Steve Case: Master salesman
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