EarthLink Reports Dramatic Decline in Second-Quarter Profits

7:00 am on July 21, 2006 | Category: Business, Internet, Telecom Services

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U.S. Internet Service Provider, EarthLink Inc., revealed yesterday that its second-quarter profit decreased by more than 60%, partly due to the continued loss of dialup internet subscribers.

The company’s profit for Q2 came in at only $16.6 million, compared to $43.8 million in the same period last year. These figures include a $13.3 billion loss incurred by an equity affiliate’s wireless joint venture.

EarthLink’s total revenue increased 2% to $332.1 million, but a net loss of 163,000 premium dialup customers, the company’s highest margin users, was largely responsible for the plummeting profits.

The ongoing decline of EarthLink’s dialup business serves as increasingly obvious evidence that the ISP will ultimately need to re-invent itself (probably as a wireless broadband provider), or die trying.

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    Edited by Jeremy Maddock