AOL Inc reported a lower first-quarter profit on declines in revenue and advertising sales as it continues to restructure as an independent company.

AOL's shares fell more than 8 percent in early trading.

Additionally, the company said that it sold its instant- messaging service ICQ to Digital Sky Technologies Limited for $187.5 million and that it is pursuing a sale of social networking site Bebo.

AOL is undergoing a turnaround following last year's split with Time Warner Inc . Under Chief Executive Tim Armstrong, the company is moving away from providing Internet access service in order to emphasize content and advertising. Armstrong said in a statement that AOL is making progress toward that long-term goal as it reduces its cost structure. Expenses fell $139 million in the first-quarter compared to the year-ago period.

Yet AOL is struggling to increase advertising revenue, even as it revamps its sales force and moves away from third-party networks. Advertising revenue in the first-quarter plummeted 19 percent to $354.3 million on weakness in display and search.

Credit Suisse analyst John Blackledge said in a research note that while AOL's overall results were better than expected, display advertising should continue to underperform the market while search declines will continue for the next few years.

The company said domestic AOL subscribers to its Internet access service fell 26 percent while subscription revenue decreased 28 percent to $282.7 million year-over-year.

Total revenue declined 23 percent to $664.3 million. Analysts had expected the company to report revenue of $679.0 million, according to Thomson Reuters I/B/E/S.

AOL's income fell to $34.7 million, or 32 cents per share, from $82.7 million, or 78 cents per share, in the same quarter last year.

Excluding items, AOL earnings per share was 86 cents versus analysts expectations of 70 cents per share, according to Thomson Reuters I/B/E/S.

AOL's shares were down 8.9 percent, or $2.48, at $25.46 on the New York Stock Exchange in early trading. (Reporting by Jennifer Saba, editing by Maureen Bavdek)