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AOL on Wednesday posted a net profit despite an eroding subscriber base as the Internet company released its first quarterly earnings since being spun off by Time Warner in December.
AOL reported a fourth-quarter net profit of 1.4 million dollars compared with a net loss of 1.96 billion dollars in the same quarter a year ago, when it was still part of the Time Warner stable.
AOL said advertising revenue declined by eight percent in the quarter to 471.6 million dollars while subscription revenue fell by 28 percent to 307.4 million dollars. Total revenue was down 17 percent to 809.7 million dollars.
The number of domestic AOL subscribers fell 27 percent in the quarter to 4.9 million.
AOL is currently the number four gateway to the Web after Google, Microsoft and Yahoo! and its dial-up Web access business has been gradually supplanted by high-speed broadband services.
AOL chairman and chief executive Tim Armstrong said "2009 marked the closing of an important chapter in AOL's history and the opening of a new chapter that we are passionately pursuing.
"We have made significant progress in support of the long-term vision we see in the future of AOL, but today's results continue to reflect the need for our focus and execution on the work required in the turnaround of the company," he said in a statement.
Armstrong, a former Google executive, has embarked on an aggressive round of cost-cutting since taking the reins at AOL in March and has said he plans to refocus the company on "content, ads and communications."
AOL has already announced plans to shut down many of its offices in Europe, including those in France, Germany, Spain and Sweden, and will have only 4,400 employees after restructuring compared with 19,000 in 2006.
In what is considered one of the most disastrous mergers ever, Time Warner combined with America Online in 2001 at the height of the dotcom boom with AOL using its inflated stock as currency for the transaction.
Time Warner was forced in 2002 to massively write down the value of AOL and the AOL name was removed from the group's corporate title in 2003.
AOL, formerly known as America Online, became a separate traded company on December 10.
AOL shares were 1.05 percent higher at 24.91 dollars in early trading on Wall Street on Wednesday.
AOL properties include online map service Mapquest, technology blog Engadget, social network Bebo and other sites.
