Continued from page 1

This includes the disposal of Bebo, which AOL bought for $850 million in 2008, hoping it would drive traffic to its other Web properties. It hasn’t, and AOL sold it during the quarter to private investment firm Criterion Capital Partners for an undisclosed amount _ most likely a fraction of what it initially paid for it.

Overall, he said, the online advertising market is recovering from last year’s slump, and he expects next year to be even stronger than this one.

“I think our results are a reflection of what we’re doing to make AOL a healthy company, rather than what’s happening in the industry,” he said.

Meanwhile, revenue from AOL’s subscription dial-up Internet business fell 27 percent to $260 million. This business has steadily declined for years as consumers gravitate to speedier broadband Internet services. The business ended the quarter with 4.4 million subscribers, down 25 percent from last year. At its peak in 2002, AOL had 26.7 million subscribers.

Clayton Moran, a Benchmark Co. analyst, said that although AOL still faces plenty of challenges, it looks much better than it did a year ago.

“I think you’re beginning to see through all the reshaping and reorganization of the company; you’re beginning to see a little light at the end of the tunnel,” he said.

___

AP Business Writer Andrew Vanacore in New York contributed to this report.