AOL: Now Our Ad Network Business Is Seizing Up, Too (TWX)

This is going to make it harder for Jeff Bewkes to get the price he wants for his wobbling AOL unit: An admission by CFO John Martin that the Web company’s ad revenue is sputtering. Bloomberg:

“It had been growing like a weed,” Chief Financial Officer John Martin said today at a Merrill Lynch & Co. investor conference in Marina del Rey, California. “We have seen some cancellations. It gives us pause in terms of our confidence to ramp advertising in the back half of the year.”

Martin’s spin, spelled out in the WSJ’s coverage of the talk (which non-subscribers can get free on their BlackBerrys), is that the slowdown is worst at AOL’s third-party ad network business (Platform A), so the effect on margins won’t be as bad as it could be. What he apparently didn’t spell out is that the ad network has been the one growth engine AOL has been able to count on in recent quarters — its owned and operated ad business, which is indeed much more profitable, has been in free-fall. So the next quarter could indeed be grim.