Earnings fell to $22.8 million, or 23 cents a share, from continuing operations from $66.2 million, or 60 cents a share, a year earlier.
Analysts on average expected AOL to post a profit of 16 cents a share, according to Thomson Reuters I/B/E/S.
Revenue dipped by 3 percent to $576.8 million.
AOL, whose media assets include Huffington Post and TechCrunch, said total advertising revenue rose by 10 percent to $331.6 million.
Overall display advertising -- representing big splashy ads that appear on Web pages and command higher rates -- rose 15 percent.
Subscription revenue from AOL's dial-up Internet access unit declined by 18 percent.
(Reporting by Yinka Adegoke in New York; Editing by Lisa Von Ahn)