Armstrong said he was nonetheless "pleased" by the company's trends given external and internal factors. The company has been restructuring and repositioning itself since being spun off from Time Warner, and attributed about $70 million of the $110 million in year-over-year ad revenues to changes it has made to improve its users' experience and "optimizing its product offerings," including a $49 million decline in third-party network revenues.
While its domestic display ad revenue is has declined on a year-over-year basis, AOL noted that it grew slightly on a sequential basis from the first quarter of 2010.
AOL's search and contextual advertising sales fell 28% to $105.8 million in the quarter.
Subscription also declined - 25% on a year-over-year basis.
AOL also got some bad news Tuesday in an ongoing legal battle to protect the name of its Advertising.com division, a unit that had been downplayed previously as part of Platform A, but is now taking center stage again for the company.
A U.S. federal appeals judge ruled that AOL cannot block a company called Advertise.com Inc. from using that name on the basis that it might confuse Internet users with Advertising.com. The ruling reversed a lower court ruling in AOL's favor.