AOL adjusts pre-merger revenues by $200m
An internal review of AOL's accounts has revealed the company had overstated its revenues from advertising by $200m (£129m)prior to its merger with Time Warner.
The discovery has meant that the group’s profits have been inflated by nearly $100m since September 2000. The company was undertaking the review at a time when its online advertising practices are being investigated by the Securities and Exchange Commission.
The biggest part of the restatement came from the third quarter of 2000, with revenues from that period being inflated by $66m. The company had claimed a growth rate in advertising income of 80% during this period, when in fact it should have been closer to 60%.
AOL said the overstatement represented only 1% of the company’s total revenues and 2% of earnings before interest, taxes, depreciation and amortisation, but was taking the matter very seriously.