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AOL revenue, profit jump on strong ad growth

Global ad sales rise to $473.4 million, contributing to a 12 percent increase in AOL's total revenue for the quarter.

AOL

AOL had a strong third quarter as advertising revenue soared thanks in large part to its platform for selling ads on third-party sites.

During the third quarter, advertising revenue rose 18 percent to $473.4 million. AOL's platform for selling ads on third-party sites saw revenue jump 44 percent to $215.1 million. The company said the platform's growth was driven by sales of premium formats and the inclusion of Adap.tv, which provides video advertising to brands, agencies, publishers and ad networks.

AOL shares were down Thursday by 2.5 percent, or $1.12, to $42.75.

Despite the good new for its third-party ad sales platform, not everything in AOL's third-quarter earning was so pleasing. Display ads on AOL properties were stagnant, generating $141.5 million in the quarter. Revenue from AOL's search properties rose only three percent in the third quarter to $97.9 million.

AOL had a reason for the stagnant display ad business, saying ads generated from shuttered brands, including local news service Patch, didn't hit its financials. The company reported that if those "impacts" were excluded, display ad revenue on AOL properties would have risen seven percent.

"AOL continued its strong growth in consumer traffic, revenue and profitability across its portfolio of assets," said Tim Armstrong, AOL chairman and CEO, in a statement. "AOL is a leader in global content, video, mobile, and programmatic advertising and is positioned directly at the center of the most disruptive changes happening online and offline in culture and code."

Net income for AOL rose to $28.5 million, or 35 cents per share, in the third quarter ended September 30, from $2 million, or 2 cents a share, a year earlier. AOL posted revenues of $626.8 million, a 12 percent increase compared to the $561.3 million the company generated in the third quarter of 2013. Wall Street was expecting earnings of 52 cents per share on $624 million.