The timing of AOL's second quarter earnings report was not so good. On Tuesday, the Dow Jones U.S. Tech Index sunk by 5.8 percent--just slightly higher than the Dow Jones Industrial average drop of 5.6 percent--and AOL's stock sunk 6.4 percent. The earnings report happened to be the best AOL has seen in a while, but it still isn't great. The company lost $11.8 million in the second quarter, partly due to increased spending on its hyperlocal network Patch and "other strategic" investments. Revenue on the whole was down 8 percent to $542.2 million, but AOL did finally see the signs of a turnaround in total advertising revenue, which rose 5 percent.
Chairman and CEO Tim Armstrong did his best to stay positive about the somewhat humdrum numbers, calling the report a "meaningful step forward." Indeed, compared to a year ago, this earnings report looks great. In the second quarter of 2010, AOL lost a whopping $1 billion, and the company hasn't seen a rise in advertising dollars since 2008. The company attributes the bump to the recent acquisitions of The Huffington Post and TechCrunch. Armstrong said, "AOL is singularly focused on becoming the next great media company for the digital age and we have positioned the Company’s best people, technology and assets in front of some of the largest opportunities on the internet."