AOL Inc is beginning to show progress in display advertising revenue.

The company reported on Wednesday that first-quarter display advertising revenue grew for the first time in a little over three years, increasing 4 percent to $130.5 million.

It looks like they are starting to turn the corner on revenue, said Ross Sandler an analyst with RBC Capital Markets.

AOL, spun out from Time Warner about a year and half ago, has been trying to regain its former luster. Over a decade ago it was one of the Internet's most popular destination dominated by email.

Since the separation from Time Warner, AOL has been actively gobbling up media-related sites, including a $315 million purchase of the Huffington Post in February, cutting costs, and retuning its sales force.

It is a milestone quarter for us at AOL, said AOL Chief Executive Tim Armstrong on a conference call. I think those changes are really paying off.

Overall advertising revenue fell 11 percent to $313.7 million on declines in search and third-party network advertising.

Total revenue at the company fell 17 percent to $551.4 million. Analysts on average expected total revenue of $536.4 million, according to Thomson Reuters I/B/E/S.

I like these AOL numbers, said Laura Martin, an analyst with Needham & Co. I like the fact that (subscription) churn is lower. It really says the deterioration is slowing it will hold up earnings longer.

Revenue from dial-up subscriptions dropped 24 percent to $215.4 million.

First-quarter profit fell 86 percent to $4.7 million, or 4 cents per share, compared with $34.7 million, or 39 cents per share, a year ago.

AOL adjusted earnings per share of 22 cents beat the street's consensus of 19 cents per share.

(Reporting by Jennifer Saba in New York and Himank Sharma in Bangalore; Editing by Unnikrishnan Nair, Dave Zimmerman)