This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

AOL Investors Seek Direction On MapQuest

NEW WORK (The Deal) -- When AOL  (AOL) reports fourth-quarter earnings on Thursday, investors will look for details from chairman and CEO Tim Armstrong about the company's recent divestiture of local news site Patch.

Investors will also hope for clues about what else AOL could shed as the company focuses on advertising technology and on video ads in particular.

Moves such as the $405 million purchase of video ad company Adap.tv last September reflect the emphasis on advertising technology. Meanwhile, AOL's portfolio of assets and brands includes late-'90s acquisitions such as MapQuest and Moviefone, which may be tangential.

Shareholders received the Patch disposal favorably.

AOL announced after the bell on Jan. 15 that it would contribute Patch to a joint venture controlled by tech-focused turnaround investor Hale Global. The stock increased 11%, to $52.54, the next day, but has since traded back to about $48.

Cowen & Co. LLC analyst John Blackledge wrote in a Wednesday note that the move "eliminates a distraction" and showed that management "will take the necessary steps to ensure longer term shareholder returns."

MapQuest could have value. The unit operates the No. 2 map website and the No. 3 mobile mapping app. MapQuest recently updated the app for Apple's  (AAPL) iOS7.

AOL doesn't break out information for MapQuest, but one analyst, who requested anonymity, suggested it could be worth $500 million.

Seth Shafer of SNL Kagan observed that MapQuest has come up as a potential divestiture in recent years. "There is not a lot of advertising crammed into it," he said.

"[Mapquest] is also sort of conspicuously not branded as AOL," he added. "It doesn't seem to fit the model of where they are going with the focus on video advertising."

Advertising is the source of AOL's growth. Cowen & Co. said it expects fourth-quarter advertising revenue to increase 18% to $410 million, with Adap.tv contributing about $50 million in new sales. The firm said it expects AOL to report $2.3 billion in revenue for 2013, an increase of 4.7%.

Shafer noted that AOL has been pushing hard on "programmatic" advertising sales, in which a company or agency could buy advertising for all of its inventory available through a computer interface rather than through a salesperson.

"AOL has really hung their hat on that idea," he said.

Moviefone and MapQuest were acquired before the Time Warner merger, when Bob Pittman and Steve Case ran the Internet company. AOL bought Moviefone for $388 million in stock in 1999. A year later, AOL paid $1.1 billion in stock for MapQuest, which has likely retained more of its value than the movie listing site.

Microsoft  (MSFT) and Amazon.com  (AMZN) have at times been viewed as potential suitors for MapQuest.

Microsoft has demonstrated an interest in location-based online media, with a
$15 million investment in FourSquare Labs Inc. in early February.

Amazon's efforts with Kindle tablets and readers could dovetail with mapping applications.

AOL doesn't face pressure to unload an operation like MapQuest at the moment. The business seems to reflect the direction of pre-Time Warner AOL more than that of Armstrong's current team.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs