Back in the late 1990s, AOL was the dominant Internet provider. It charged an hourly rate for online access. However, AOL was slow to respond to changes in the Internet business model and lost a significant amount of market share. Today, advertising revenue is a major source of income for the company. The following data show the advertising revenue, in millions of dollars, for each quarter over a recent three year period. These data can also be found in the Excel file AOL.xlsx.

a. Construct a graph showing AOL’s advertising revenue over time.

b. Forecast the advertising revenue for each quarter in 2013 using multiplicative decomposition.

c. Interpret the meaning of the seasonal components.

d. Calculate the MAD for this forecast.

e. What can you conclude about AOL’s business outlook for 2013?

Revenue (million s) Quate 346 297 293 332 2011 313 319 318 364 2012 330 338 340 411 4