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Comment by nathan_long | Hacker News Reader

>> [dialup subscriptions] plus revenue associated with services like AIM, accounts for more than 100 percent of the company's profit

More than 100 percent of its profits? Can someone explain that to me?

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It's because the other part of their business, media and advertising, loses money, as the article states.

If you make $168M from subscriptions and lose $5M from media, then subscriptions account for about 103% of your profits (168/(168-5)).

profits = revenue - expenses

So, the revenue from their subscriptions/AIM customers is not merely the only thing which is profitable for them, but the other lines of business are all run at a loss.

Fictional example:

Line Revenue - Expenses = Profit dialup 1000 - 100 = 900 everything else 200 - 500 = (-300) Totals: 1200 - 600 = 600

Well, any revenue usually accounts for more than 100% of profit.

The rest of the company has a negative profit (loss). For example, with made up numbers: $100mm profit from subscription division + $50mm net loss from advertising business = $50mm total profit, but 200% of that total profit comes from the subscriptions.

What this is saying is that subscriptions are making more money for AOL overall than the other ventures are losing, so they are making profit above and beyond other losses (as opposed to breaking them even.)

It's a shorthand way for the writer to say that subscriptions are such a cash cow, it really doesn't matter what the other divisions are doing.

I guess if it made losses in other areas, then added together, the total profit would be less than the revenue in "services like AIM"...

Maybe the amount of profit from those two equals say a number that is 120% of their total net profit, but losses in other divisions bring their total net profit down.

Therefore, the profits of those two divisions is greater than the profit of the company?

Effectively, their customers are paying to be advertised to.

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