AOL’s Slide on Display

The display ad market is starting to percolate once again — except at AOL.

The newly spun-off Web media company today announced first-quarter earnings, reporting that display advertising had slid by 13 percent to $125.6 million vs. the same quarter in 2009. The results were slightly better in the U.S., where display ad revenue fell by 10 percent; international display dollars were off by 29 percent.

Those results come just a week or so after portal rivals Yahoo and Microsoft’s MSN announced major spikes in display advertising — increases of 20 percent and 19 percent, respectively, signaling a turnaround in the long beleaguered market.

But AOL’s ongoing reinvention, during which officials have publicly stated that their ambition is for the company to become the biggest player in display ads, has yet to bear fruit. In a statement, AOL CEO and chairman Tim Armstrong said that to date, AOL has been hampered by a need to restructure its costs, and was now looking to execute on its long-term plans.

“While our restructuring had an impact on Q1 advertising results, we are encouraged by the advertising market’s recent strength,” Armstrong said. “We are now entering the second phase of AOL’s plan, which is to greatly improve the consumer experience, scale the advertising systems and teams, and aggressively pursue our strategy in the marketplace.”

In conjunction with its earnings announcement, AOL announced it had sold the community/messaging service ICQ to Digital Sky Technologies, the Russian firm best known for investing in Facebook, for $187.5 million.