Exhibit 99.1

AOL REPORTS Q1 EARNINGS

Improved Revenue & Expense Trends Lead AOL to Increase 2012 Adjusted OIBDA Guidance to $350 Million*

Global Advertising Revenue Grows Year-Over-Year for the Fourth Consecutive Quarter

Combined AOL Properties Display & Third Party Network Revenue Grows 10% Year-Over-Year

Subscription Churn Rates the Lowest in Seven Years

Significant Improvements Made to Search and Contextual Revenue Trends

Operating Expenses Decline Quarter-over-Quarter for the Fourth Consecutive Quarter

Reported EPS of $0.22 Compares to $0.04 in Q1 2011

AOL Repurchased 1.8 M Shares Since its Last Earnings Release at an Average Price of $17.65

AOL has Repurchased 14.8M Shares To-Date at an Average Price of $14.11

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NEW YORK – May 9, 2012 – AOL Inc. (NYSE: AOL) released first quarter 2012 results today.

“AOL is a much stronger company today than a year ago and began 2012 by growing advertising revenue, lowering expenses and improving Adjusted OIBDA trends,” said Tim Armstrong, Chairman and CEO. “In 2012 and beyond we are simultaneously focused on the continued successful execution of our strategy and on creating and unlocking value for our shareholders.”

Summary Results

In millions (except per share amounts)

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KEY QUARTERLY TRENDS

Revenue Trends:

Profitability Trends:

Product/Consumer Trends:

Asset, Cash & Cash Flow Trends:

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DISCUSSION OF RESULTS

Revenue

		Q1 2012				Q1 2011				Change
		(In millions)
Advertising revenue
Display		$	130.3			$	128.5				1	%
Display - domestic			118.9				120.0				-1	%									Q1 2012				Q1 2011				Change
Display - international			11.4				8.5				34	%
Search and contextual			89.6				95.8				-6	%						AOL Properties Display		$	130.3			$	128.5				1%
AOL Properties			219.9				224.3				-2	%						Third Party Network			110.2				89.4				23%
Third Party Network			110.2				89.4				23	%						AOL Properties Display &
Total advertising revenue			330.1				313.7				5	%						Third Party Network		$	240.5			$	217.9				10%
Subscription revenue			182.1				215.4				-15	%
Other revenue			17.2				22.3				-23	%
Total revenue		$	529.4			$	551.4				-4	%

Global advertising revenue grew 5% year-over-year in Q1 2012, reflecting double-digit growth in the third party network and growth in global display revenue, partially offset by declines in search and contextual revenue.

Global display revenue was driven by growth in international display advertising, partially offset by a slight decline in domestic display advertising revenue. International display revenue growth reflects continued growth in both the U.K. and Canada. Domestic display advertising revenue declined primarily reflecting a decline in reserved impressions sold, partially offset by growth in reserved inventory pricing and Patch revenue.

Third party network revenue increased $20.8 million, reflecting 14% growth in Advertising.com and $2.4 million related to one month of additional goviral revenue (acquired January 31, 2011). Advertising.com growth reflects an increase in advertisers and publishers on the network and increased sales of premium packages and products. Third party network revenue also reflects $6.4 million related to Ad.com Japan, a Japanese joint venture which AOL began consolidating during the quarter as a result of acquiring a controlling interest in the joint venture by increasing its ownership from 50% to 53% and gaining control of the board and day-to-day operations.

Search and contextual revenue trends continued to improve year-over-year and revenue grew sequentially for the second consecutive quarter. Total search and contextual revenue declined $6.2 million year-over-year, primarily due to a 14% decline in domestic AOL-brand access subscribers and fewer queries from cobranded portals and international markets. Search and contextual revenue declines were partially offset by continued growth in search revenue on AOL.com.

Subscription revenue declines reflect a 14% decline in domestic AOL-brand access subscribers. The decline in subscription revenue was the lowest level of decline in 5 years. In addition to benefitting from the continued maturation of the tenured base, the decrease in the rate of decline in subscription revenue reflects the impact of a price rationalization program AOL began in late Q3 2011. This program significantly reduced the number of price points and more clearly defined and enhanced the value of our product offerings for consumers. Additionally, monthly average churn contributed to the lower rate of decline, falling from 2.5% in Q1 2011 to 2.0% in Q1 2012.

Other revenue declines primarily reflect lower mobile carrier revenues. Revenue from mobile carriers represented 32% of total “Other revenue” in Q1 2011 and 11% in Q1 2012.

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Profitability

AOL’s Adjusted OIBDA decline was the lowest rate of decline in four years and primarily reflects the lower revenue discussed above, partially offset by lower cost of revenues and general and administrative expenses. Costs of revenues have declined sequentially for three consecutive quarters and during Q1 declined year-over-year for the first time since Q4 2010, driven by lower network related expenses and reduced content costs related primarily to AOL’s reduced reliance on freelancers. Cost of revenue declines were partially offset by $9.4 million of increased TAC, as a result of continued growth in third party network advertising revenue, and $4.7 million of increased personnel costs related to 2011 headcount. General and administrative expenses year-over-year declines reflect a reduction in personnel costs including reduced corporate headcount in Q1 2012. Operating and net income grew meaningfully year-over-year driven by the aforementioned reduction in expenses, lower restructuring costs and a $22.7 million reduction in depreciation and amortization in Q1 2012 versus Q1 2011. The year-over-year decline in depreciation and amortization primarily reflects a decline of $19.6 million related to certain intangible assets being fully amortized in 2011. The year-over-year decline in depreciation and amortization in 2012 also reflects decommissioning certain network equipment, partially offset by an increase of $5.0 million primarily resulting from our 2011 and 2012 acquisitions.

Tax

The Company had pre-tax income from operations of $39.8 million and a related income tax expense of $18.8 million, resulting in an effective tax rate of 47.2% for the three months ended March 31, 2012, as compared to an effective tax rate of 142.0% for the three months ended March 31, 2011. The effective tax rate for the three months ended March 31, 2012 differed from the statutory U.S. federal income tax rate of 35.0% primarily due to foreign losses that did not produce a tax benefit and due to a change in state tax rates. The effective tax rate for the three months ended March 31, 2012 differed from the effective tax rate for the three months ended March 31, 2011 primarily due to a $7.1 million income tax benefit in 2011 associated with a worthless stock deduction related to the sale of a subsidiary and favorable adjustments in 2011 of $8.2 million related to escrow disbursements from prior acquisitions for which we concluded we will be able to recognize a tax benefit.

Cash Flow

Q1 2012 cash provided by operating activities was $19.9 million while Free Cash Flow was a $9.5 million outflow. Cash provided by operating activities and Free Cash Flow increased versus Q1 2011, primarily reflecting the growth in operating income, partially offset by incentive compensation payments made in the first quarter of 2012 related to prior year acquisitions. Free Cash Flow for the quarter was negative due to the payment of 2011 employee bonuses.

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Subsequent Event

On April 5, 2012, we entered into a definitive agreement (“the Purchase Agreement”) to sell over 800 of our patents and their related patent applications (the “Patent Portfolio”) to Microsoft, and to grant Microsoft a non-exclusive license to our retained patent portfolio, for aggregate proceeds of approximately $1.1 billion in cash (excluding transaction costs). The transaction is structured as a purchase of all of the outstanding shares of a wholly owned non-operating subsidiary and the direct acquisition of those patents in the Patent Portfolio not held by the subsidiary.

The closing is expected to occur by the end of the year. Both parties are required to use their reasonable best efforts to close the transaction within six months. However, this date may be extended by either party for 180 days, and if extended by Microsoft, a per day fee will apply. Microsoft would be required to pay the Company a termination fee of $211.2 million if the transaction is terminated other than by mutual written consent, if the Company’s failure to perform a covenant is the cause of the termination or if the conditions to the agreement are met and the Company fails to close the transaction within two business days. Based on our utilization of tax losses generated by the sale of the subsidiary and existing deferred tax assets, we do not expect the $1.1 billion proceeds to result in material cash taxes.

OPERATING METRICS

Webcast and Conference Call Information

AOL Inc. will host a conference call to discuss first quarter 2012 financial results on Wednesday, May 9, 2012, at 8:00 am Eastern Time (ET). To access the call, parties in the United States and Canada should call toll-free (800) 299-0148 and international parties should call (617) 801-9711. Additionally, a live webcast of the conference call, together with supplemental financial information, can be accessed through the Company's Investor Relations website at http://ir.aol.com. In addition, an archive of the webcast can be accessed through the link above for one year following the conference call, and an audio replay of the call will be available for two weeks following the conference call by calling (888) 286-8010 and international parties should call (617) 801-6888. The access code for the replay is 37276329.

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FINANCIAL STATEMENTS

AOL Inc.

Consolidated Statements of Comprehensive Income

(In millions, except per share amounts)

6

AOL Inc.

Consolidated Balance Sheets

(In millions, except per share amounts)

7

AOL Inc.

Consolidated Statements of Cash Flows

(In millions)

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SUPPLEMENTAL INFORMATION – UNAUDITED

Items impacting comparability: The following table represents certain items that impacted the comparability of net income attributable to AOL Inc. for the three months ended March 31, 2012 and 2011 (In millions, except per share amounts):

AOL Inc.

Reconciliation of Adjusted OIBDA to Operating Income (Loss) and Free Cash Flow to Cash Provided by Operating Activities

(In millions)

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Note Regarding Non-GAAP Financial Measures

This press release and its attachments include the financial measures Adjusted OIBDA and Free Cash Flow, both of which are defined as non-GAAP financial measures by the Securities and Exchange Commission (SEC). These measures may be different than similarly-titled non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles (GAAP). Explanations of our non-GAAP financial measures are as follows:

Adjusted OIBDA. We define Adjusted OIBDA as operating income before depreciation and amortization excluding the impact of restructuring costs, noncash equity-based compensation, gains and losses on all disposals of assets (including those recorded in costs of revenues) and noncash asset impairments. We consider Adjusted OIBDA to be a useful metric for management and investors to evaluate and compare the performance of our business on a consistent basis across reporting periods, as it eliminates the effect of noncash items such as depreciation of tangible assets, amortization of intangible assets that were primarily recognized in business combinations and asset impairments, as well as the effect of restructurings and gains and losses on asset sales, which we do not believe are indicative of our core operating performance. We exclude the impacts of equity-based compensation to allow us to be more closely aligned with the industry and analyst community. A limitation of this measure, however, is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business or the current or future expected cash expenditures for restructuring costs. The Adjusted OIBDA measure also does not include equity-based compensation, which is and will remain a key element of our overall long-term compensation package. Moreover, the Adjusted OIBDA measures are limited in not reflecting gains and losses on asset sales or impairment charges related to goodwill, intangible assets and fixed assets which impact our operating performance. We evaluate the investments in such tangible and intangible assets through other financial measures, such as capital expenditure budgets, investment spending levels and return on capital.

Free Cash Flow. We define Free Cash Flow as cash provided by operating activities, less capital expenditures and product development costs and principal payments on capital leases. We consider Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the continuing business that, after capital expenditures and product development costs and principal payments on capital leases, can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening the balance sheet. Analysis of Free Cash Flow also facilitates management's comparisons of our operating results to competitors' operating results. A limitation on the use of this metric is that Free Cash Flow does not represent the total increase or decrease in cash for the period because it excludes certain non-operating cash flows.

Unique Visitor Metrics

We utilize unique visitor numbers to evaluate the performance of AOL Properties. In addition, we utilize unique visitor numbers to evaluate the reach of our total advertising network, which includes both AOL Properties and the Third Party Network. Unique visitor numbers provide an indication of our consumer reach. Although our consumer reach does not correlate directly to advertising revenue, we believe that our ability to broadly reach diverse demographic and geographic audiences is attractive to brand advertisers seeking to promote their brands to a variety of consumers without having to partner with multiple content providers. The source for our unique visitor information is a third party (comScore Media Metrix, or “Media Metrix”). While we are familiar with the general methodologies and processes that Media Metrix uses in estimating unique visitors, we have not performed independent testing or validation of Media Metrix’s data collection systems or proprietary statistical models, and therefore we can provide no assurance as to the accuracy of the information that Media Metrix provides.

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Cautionary Statement Concerning Forward-Looking Statements

This press release and our conference call at 8:00 a.m. Eastern Time today may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding business strategies, market potential, future financial and operational performance and other matters. Words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,” “will,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements. These forward-looking statements are based on management’s current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances. Except as required by law, we are under no obligation to, and expressly disclaim any obligation to, update or alter any forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. Various factors could adversely affect our operations, business or financial results in the future and cause our actual results to differ materially from those contained in the forward-looking statements, including those factors discussed in detail in the “Risk Factors” section contained in our Annual Report on Form 10-K for the year ended December 31, 2011 (the “Annual Report”), filed with the Securities and Exchange Commission. In addition, we operate a web services company in a highly competitive, rapidly changing and consumer- and technology-driven industry. This industry is affected by government regulation, economic, strategic, political and social conditions, consumer response to new and existing products and services, technological developments and, particularly in view of new technologies, the continued ability to protect intellectual property rights. Our actual results could differ materially from management’s expectations because of changes in such factors. Achieving our business and financial objectives, including growth in operations and maintenance of a strong balance sheet and liquidity position, could be adversely affected by the factors discussed or referenced under the “Risk Factors” section contained in the Annual Report as well as, among other things: 1) changes in our plans, strategies and intentions; 2) continual decline in market valuations associated with our cash flows and revenues; 3) the impact of significant acquisitions, dispositions and other similar transactions; 4) our ability to attract and retain key employees; 5) any negative unintended consequences of cost reductions, restructuring actions or similar efforts, including with respect to any associated savings, charges or other amounts; 6) market adoption of new products and services; 7) the failure to meet earnings expectations; 8) asset impairments; 9) decreased liquidity in the capital markets; 10) our ability to access the capital markets for debt securities or bank financings; and 11) the impact of “cyber-warfare” or terrorist acts and hostilities. In addition, matters relating to the sale of the Patent Portfolio to Microsoft are subject to uncertainty and changes in circumstances, including, but not limited to the approval of the transaction by antitrust authorities and the satisfaction of the other closing conditions to the transaction as well as to factors that could affect the manner, timing and amount of the return of any of the sale proceeds to AOL shareholders including the need for AOL to retain cash for its business or to satisfy liabilities.

About AOL

AOL Inc. (NYSE: AOL) is a brand company, committed to continuously innovating, growing, and investing in brands and experiences that inform, entertain, and connect the world. The home of a world-class collection of premium brands, AOL creates original content that engages audiences on a local and global scale. We help marketers connect with these audiences through effective and engaging digital advertising solutions.

From time to time, we post information about AOL on our investor relations website (http://ir.aol.com) and our official corporate blog (http://blog.aol.com).

Contacts:

AOL Investor Relations

Eoin Ryan

212-206-5025

Eoin.Ryan@teamaol.com

AOL Marketing & Corporate Communications

Maureen Sullivan

212-206-5030

Maureen.Sullivan@teamaol.com

AOL Inc.

770 Broadway, New York, NY, 10003

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