8:41 p.m. | Updated
AOL, the onetime Internet giant that is transforming itself into a media company, on Wednesday announced quarterly earnings of $970.8 million, or $10.17 a share, up from a loss of $11.8 million a year earlier. The turnaround was partly attributable to a patent deal with Microsoft that closed on June 15 and helped contribute a $945.8 million gain for the quarter. Excluding extraordinary items, AOL earned 23 cents a share.
The second quarter of 2012 also represented a slowing of the company’s decline in revenue. Total revenue for the company slid 2 percent, to $531.1 million for the quarter, the smallest decline in seven years. Global advertising revenue increased 6 percent from the comparable period last year, to $337.8 million, up from $319 million in 2011.
But revenue from display advertising, including on properties like The Huffington Post, Patch and from a partnership with Microsoft and Yahoo, was largely flat with a 2 percent increase for the quarter.
“We should be a growth company in display advertising,” said Tim Armstrong, AOL’s chief executive, in a call with reporters. “We should be doing a better job at it.” For advertisers, that approach will include “one insertion order, all screens,” he said.
According to the research company eMarketer, AOL’s share of online ad revenue in the United States declined to 2.8 percent in 2011, down from 3.4 percent in 2010. The total online advertising market is expected to grow to $39.5 billion in 2012 and display advertising to reach $15.3 billion this year.
Mr. Armstrong highlighted the company’s efforts to use data to increase its focus on video, mobile and targeted advertising. “Pricing is dependent on product,” he said, adding that the company had “very strong” pricing for its digital advertising product, Project Devil, and its video offerings. “I expect video to remain a very strong marketplace,” he said.
The bullish stance on video includes The Huffington Post’s video program, HuffPost Live, which begins Aug. 13 and will include 12 hours of live streaming a day.
Mr. Armstrong discussed Patch, AOL’s network of local news Web sites, saying the company had secured a deal with a major national advertiser but would not offer details on who that was.
“We basically want to have an ongoing multidecade relationship with consumers,” he said. The Patch sites will start to include more news, more directory listings and more “community involvement,” he added. “It’s an opportunity for us to mimic the way people in towns live their lives,” he said.