Down but not out: AOL finds its legs as talk of Yahoo! merger resurfaces

AOL is expected to surpass its quarterly earnings forecast, thanks to gains made in display advertising sales, according to analysts at financial firm UBS.

The much-maligned media company is to report revenues of $532m (£340m) this quarter, rather than the predicted $525m (£335m). The boost comes from year-over-year growth of its domestic display sales, up 21% for the quarter.

The figures might appease AOL’s investors, who are looking towards CEO Tim Armstrong for answers, who defected from Google 2009 to lead the fallen giant after its disastrous 10-year merger with Time Warner.

Although, hands may still be wringing over AOL’s recent $350m (£223m) acquisition of the Huffington Post, as well as its localised news network Patch, which it has plied $160m (£102m) into this year alone.

Yesterday, Armstrong pitched again the idea of a merger with Yahoo! to investors. The idea is nothing new, having been sitting on the back burners for the better part of three years.

Armstrong says a merger with Yahoo! could bring $1.5bn (£956m) in cost savings to AOL, from overlapping data centers and duplicate news sites. The merger would also bring in bulk-buy advertisers looking for a bigger audience.