• by Joe Mandese  @mp_joemandese, August 9, 2011

AOL took another beating in the second quarter, with total revenues falling 8%, due mainly to the continuing erosion of its subscription revenues, which fell 23%. On a positive note, AOL continued to build momentum in advertising sales, indicating that it is working its Project Devil premium advertising initiative is finally paying off.

During the second quarter of 2011, AOL's advertising revenues rose 5% to $319 million. At its current rates, advertising now represents a significant majority for AOL, which originally bean as an Internet subscription service. Advertising accounted for nearly 59% of AOL's revenues during the second quarter of this year, vs. a little over 51% during the same quarter last year.

But Project Devil appears to be having a significant effect on AOL overall. While the company did not explicitly attribute increases in its consumer usage during the second quarter to the initiative, an important part of Project Devil was intended to improve the average user's experience by reducing the amount of advertising clutter, and improving both content and navigation on its pages.

On the sales side, AOL said its so-called "devil" impressions using Pictela's platform grew more than 100% during on a sequential basis from the first quarter of 2011.

AOL has scheduled a call to discuss its results later today, but in this morning's earnings statement, Chairman-CEO Tim Armstrong described the results as, "a meaningful step forward in the comeback of the AOL brand."