AOL is acing advertising's shift to mobile: CEO Tim Armstrong

AOL reported quarterly revenue above analysts' expectations, boosted by demand for its real-time bidding platform that helps advertisers place video and display ads on other digital properties.

"The strength that you see in these number are essentially our ability to grow very strong sets of supply across mobile, video, programmatic. And second of all you're seeing ad pricing going up," AOL CEO Tim Armstrong told CNBC's "Squawk Box." "We're doing a very good job navigating the platform shift in advertising from offline to online."

Advertising has become a major revenue stream for AOL as the company moves away from dial-up subscription serviced, helped by acquisition of automated advertising platforms such as Adap.tv.

Revenue in AOL's ad platform business rose 21 percent to $279.8 million, accounting for 45 percent of total revenue. Ad sales across AOL's brands grew 8 percent as a surge in search ads more than offset continued weakness in display ads.

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AOL's content businesses include the Huffington Post news website and the TechCrunch blog.

Asked whether the Huffington Post was making a profit yet, Armstrong said the website is profitable in its core U.S. market and video content area, but the company is continuing to invest in international expansion.

"We're still in investing mode," he said, adding that the Huffington Post has grown its worldwide user base to about 220 million from 20 to 30 million when it purchased the news site in 2011.

AOL has been one of the fastest growing consumer properties among large Internet companies, which has allowed it to grow its advertising business and increase ad pricing fairly quickly, he said.

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Shares of AOL were up more than 5 percent in premarket trading on Friday.

Total revenue rose 7.2 percent to $625.1 million, topping the average analyst estimate of $594.6 million.

Subscription revenue fell 6 percent to $141.6 million as the number of domestic subscribers fell 11 percent.

Net income attributable to AOL fell to $7 million, or 9 cents per share, in the first quarter ended March 31 from $9.3 million, or 11 cents per share, a year earlier. Excluding items, the company earned 34 cents per share.

Analysts on average had expected a profit of 32 cents per share, according to Thomson Reuters I/B/E/S.

—Reuters contributed to this report.

Disclaimer: AOL has a content and advertising partnership with Comcast, which owns NBCUniversal, the parent of CNBC and CNBC.com.

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