The digital media and entertainment company said revenue from ads bought and sold on its electronic exchange soared 55 percent to almost $187 million.
Advertising is an important revenue stream for AOL, and its growth is critical to the company's overall performance, especially as subscription revenue from its dial-up service slips away.
AOL, which owns the Huffington Post website and the TechCrunch blog, has been investing in advertising, especially in the so-called programmatic side, referring to machine-buying and selling of digital advertising.
Total revenue rose to $583.3 million from $538.3 million in the quarter. Ad revenue jumped 16 percent to $433.4 million.
Net income attributable to AOL fell to $9.3 million, or 11 cents per share, from $25.9 million, or 32 cents per share, a year earlier.
The stock was down 7.2 percent to $40.75 in premarket trading.
On Tuesday AOL said it was acquiring Convertro Inc, a platform that helps advertisers manage spending budgets across different media, for $101 million. In March the company unveiled a new one-stop advertising platform aimed at changing the media-buying process for digital advertising.
Still, the company is struggling in some areas, including search advertising, which Chief Executive Officer Tim Armstrong flagged during a conference call with analysts. He said in January, the company experienced "headwinds" that pushed search advertising revenue down 1 percent.
© Thomson Reuters 2014
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