The US internet giant posted a 26% drop in total revenues for the quarter, which fell to $584.1m from $791.5m for the same period last year.
Advertising revenue decreased by 27% from $407.2m in Q2 of 2009 to $296.9m for this quarter, while subscription revenue also dropped by 27% from $355.7m to $260.2m.
#Tim Armstrong, AOL chairman and chief executive, said, "In the second quarter, we continued our efforts to successfully reposition for growth and the company is getting healthier every day."
"Although we have much more significant goals for the future of AOL, we are pleased with this quarter's internal and external trends."
It recorded a goodwill impairment charge of $1.4bn during the three months ended June 30, 2010, due to the sale of Bebo
AOL sold on social network Bebo to US-based venture capital firm Criterion Capital Partners on June 16.
On 30 July AOL entered into an agreement to sell its investment in Kayak Software Corporation and said it expects to complete the sale in the third quarter of 2010 for a pre-tax gain of $17.5m.
Read the full AOL Q2 earnings report.