• by Gavin O'Malley  @mp_gavin, July 29, 2009

Time Warner's spin-off of AOL couldn't come soon enough as ad sales at the long-ailing unit fell 21% in the second quarter.

Albeit in a dour ad climate, AOL's total revenue fell 24% to $804 million in the quarter -- actually showing an accelerated decline from the first quarter when ad sales dropped 20% to $109 million.

"We're on track to spin off AOL to our stockholders around the end of this year," said Time Warner head Jeffrey Bewkes. "Separating AOL will benefit both companies, enabling Time Warner to concentrate fully on our core content business and improving AOL's operational and strategic flexibility."

Earlier this week, Google sold its 5% stake in AOL back to Time Warner at a significant loss. Indeed, Google bought the stake in 2005 for $1 billion, and sold it back for $283 million.

Separately, AOL on Wednesday promoted Stephane Panier to the role of president at social network Bebo. Panier, who joined AOL in January after six years at Google, has until now served as chief operating officer of Bebo.

Bebo has been placed in a new division called AOL Ventures, and Panier will report to Jon Brod, executive vice president of AOL Ventures.

Last week, AOL outlined a new five-point strategy for the soon-to-be-independent company. As outlined internally and to members of the press, it includes the continued expansion of vertical content, local and online mapping services, its third-party ad network, communication tools, and early-stage investment through a newly formed AOL Ventures arm.

The new AOL will exist less as a Web portal, and more as a fragmented network of niche content sites. This MediaGlow network, so-called, presently encompasses over 70 niche content sites -- with many more on the way, according to Jeff Levick, recently appointed president of AOL Advertising.

Levick was brought on mid-April by AOL's recently named CEO, and former Google colleague, Tim Armstrong.

In the second quarter, AOL drew 107 million average monthly domestic unique visitors and 51 billion domestic page views, according to comScore, which translates into 159 average monthly domestic page views per unique visitor.

In a bitter reminder of its disastrously fated origins, AOL also reported a 27% drop in subscriber revenue.

As of June, the AOL service had 5.8 million U.S. access subscribers, a decline of 510,000 from the prior quarter and 2.3 million from the year-ago quarter.

Overall, Time Warner reported second-quarter net income of $519 million, or 43 cents per share -- compared with $792 million, or 66 cents per share in the same quarter a year ago. Revenue, meanwhile, 9% to $6.81 billion.