Aol 10K

AOL INC.
FORM
10-Q
(Quarterly Report)
Filed 04/28/10 for the Period Ending 03/31/10

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CIK
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AOL
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2010
OR
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from
to
Commission File Number 001-34419
AOL INC.
(Exact name of Registrant as specified in its charter)
Delaware
20-4268793
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer
Identification No.)
770 Broadway
New York, NY
10003
(Address of principal executive offices)
(Zip Code)
Registrants telephone number, including area code: 212-652-6400
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12
months (or for shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange
Act.
Large accelerated filer
Non-accelerated filer
(Do not check if a smaller reporting company)
Accelerated filer
Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)
Yes
No
As of April 23, 2010, the number of shares of the Registrants common stock, par value $0.01 per share, outstanding was 106,720,530.
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AOL INC.
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION

Item 2.
Item 3.
Item 4T.
Item 1.
Cautionary Statement Concerning Forward-Looking Statements

Managements Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
1
2
17
Controls and Procedures

Financial Statements
18
19
PART II. OTHER INFORMATION

Item 1.
Item 1A.
Item 2.
Item 6.
Legal Proceedings
31
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Exhibits
32
32
32
Signatures
33
Exhibit Index
34
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AOL INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page
Number
Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and 2009
19
Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009
20
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009
21
Consolidated Statements of Equity for the Three Months Ended March 31, 2010 and 2009
22
Note 1: Description of Business, Basis of Presentation and Summary of Significant Accounting Policies
23
Note 2: Income Per Common Share
25
Note 3: Business Acquisitions, Dispositions and Other Significant Transactions
26
Note 4: Income Taxes
26
Note 5: Stockholders Equity
27
Note 6: Equity-Based Compensation
27
Note 7: Restructuring Costs
28
Note 8: Commitments and Contingencies
29
Note 9: Segment Information
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AOL INC.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (Quarterly Report) contains certain forward-looking statements regarding business strategies,
market potential, future financial performance and other matters. Words such as anticipates, estimates, expects, projects, forecasts,
intends, plans, 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 managements current expectations and beliefs
about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances. Except for
our ongoing obligations to disclose material information under the federal securities laws, 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 Item 1A Risk Factors of
our Annual Report on Form 10-K for the year ended December 31, 2009 (Annual Report). 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 managements expectations because of changes in such factors.
Further, lower than expected valuations associated with our cash flows and revenues may result in our inability to realize the value of
recorded intangibles and goodwill. In addition, 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 in Item 1A Risk Factors
in our Annual Report as well as, among other things:
decreased liquidity in the capital markets;
our ability to access the capital markets for debt securities or bank financings;
our borrowing capacity under our revolving credit facility;
the impact of terrorist acts and hostilities;
changes in our plans, strategies and intentions;
our ability to attract and retain key employees;
asset impairments;
the success of any cost reductions or similar efforts, including with respect to any associated savings, charges or other amounts;
the impact of significant acquisitions, dispositions and other similar transactions; and
the failure to meet earnings expectations.

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PART IITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
You should read the following discussion of our results of operations and financial condition together with our consolidated financial
statements and the notes thereto included elsewhere in this Quarterly Report as well as the discussion in the Item 1Business section of our
Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not
historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future
financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number
of factors, including those discussed in Item 1ARisk Factors of our Annual Report and Cautionary Statement Concerning ForwardLooking Statements herein.
Introduction
Managements discussion and analysis of financial condition and results of operations (MD&A) is a supplement to the accompanying
consolidated financial statements and provides additional information on our business, recent developments, results of operations and liquidity
and capital resources. MD&A is organized as follows:
Overview. This section provides a general description of our business, as well as recent developments we believe are important in
understanding the results of operations and financial condition or in understanding anticipated future trends.
Results of operations. This section provides an analysis of our results of operations for the three months ended March 31, 2010 and
2009.
Liquidity and capital resources. This section provides a discussion of our current financial condition and an analysis of our cash
flows for the three months ended March 31, 2010 and 2009. This section also provides a discussion of our principal debt obligations
and an update to the discussion in our Annual Report of our customer credit risk that existed at December 31, 2009.
Overview
The Spin-Off
On December 9, 2009, we completed our legal and structural separation from Time Warner Inc. (Time Warner) via a spin-off (the spinoff). In the spin-off, Time Warner shareholders of record as of 5 p.m. on November 27, 2009, the record date for the distribution, received one
share of AOL Inc. (AOL or the Company) common stock for every eleven shares of Time Warner common stock held. On December 10,
2009, AOL began trading on the New York Stock Exchange as an independent, public company.
Prior to the spin-off, we were a subsidiary of Time Warner. The financial information included herein may not necessarily reflect our
financial position, results of operations and cash flows in the future or what our financial position, results of operations and cash flows would
have been had we been an independent, publicly-traded company during all of the periods presented. We are incurring additional costs to be able
to function as an independent, publicly-traded company, including additional costs related to corporate finance, governance and public reporting.
In connection with the spin-off, we entered into transactions with Time Warner that either have not existed historically or that are on terms
different from the terms of arrangements or agreements that existed prior to the spin-off. Our historical financial information does not reflect
changes that we have experienced since the spin-off or expect to experience in the future as a result of our separation from Time Warner,
including changes in the financing, operations, cost structure and personnel needs of our business. Further, the financial statements for the
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three months ended March 31, 2009 include allocations of certain Time Warner corporate expenses. We believe the assumptions and
methodologies underlying the allocation of general corporate expenses are reasonable. However, such expenses may not be indicative of the
actual level of expense that would have been incurred by us if we had operated as an independent, publicly-traded company or of the costs we
have incurred since the spin-off or that are expected to be incurred in the future. These allocated expenses relate to various services that
historically were provided to us by Time Warner, including cash management and other treasury services, administrative services (such as
government relations, tax, employee benefit administration, internal audit, accounting and human resources), equity-based compensation plan
administration, aviation services, insurance coverage and the licensing of certain third-party patents.
Our Business
We are a leading global web services company with an extensive suite of brands and offerings and a substantial worldwide audience. Our
business spans online content, products and services that we offer to consumers, publishers and advertisers. We are focused on attracting and
engaging consumers and providing valuable online advertising services. We market our offerings to advertisers on both AOL Properties and the
Third Party Network under the brand AOL Advertising. We have the largest advertising network in terms of online consumer reach in the
United States as of March 2010.
Current Economic Environment
The global economic recession adversely impacted our advertising revenues for the year ended December 31, 2009. We do not believe that
the global economic environment had a material impact on our advertising revenues for the three months ended March 31, 2010. Further, we do
not believe the global economic recession had a material impact on our subscription revenues.
AOL Properties
We seek to be a leading online provider of consumer products and services, as well as a publisher of relevant and engaging online content
by utilizing open and highly scalable publishing platforms and content management systems. In addition, we are in the process of extending the
reach of our offerings to a consumer audience on multiple platforms and digital devices.
AOL Properties include our owned and operated content, products and services in the Content, Local, Paid Services and Consumer
Applications strategy areas, in addition to our AOL Ventures offerings. We generate advertising revenues from AOL Properties through the sale
of display advertising and search and contextual advertising. We offer advertisers a wide range of capabilities and solutions to effectively deliver
advertising and reach targeted audiences across AOL Properties through our dedicated advertising sales force. We seek to provide effective and
efficient advertising solutions utilizing data-driven insights that help advertisers decide how best to engage consumers. We offer advertisers
marketing and promotional opportunities to purchase specific placements of advertising directly on AOL Properties ( i.e. , in particular locations
and on specific dates). In addition, we offer advertisers the opportunity to bid on unsold advertising inventory on AOL Properties utilizing our
proprietary scheduling, optimization and delivery technology. Finally, advertising inventory on AOL Properties not sold directly to advertisers,
as described above, may be included for sale to advertisers with inventory purchased from third-party publishers in the Third Party Network.
Growth of our advertising revenues depends on our ability to attract consumers and increase engagement on AOL Properties by offering
compelling content, products and services, as well as on our ability to monetize such
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engagement by offering effective advertising solutions. In order to attract consumers and generate increased engagement, we have developed and
acquired, and in the future will continue to develop and acquire, content, products and services designed to meet these goals.
Google Inc. (Google) is, except in certain limited circumstances, the exclusive web search provider for AOL Properties. In connection
with these search services, Google provides us with a share of the revenue generated through paid text-based search and contextual advertising
on AOL Properties. For the three months ended March 31, 2010, advertising revenues associated with the Google relationship (substantially all
of which were search and contextual revenues generated on AOL Properties) were $116.4 million. Domestically, we have agreed, except in
certain limited circumstances, to use Googles search services on an exclusive basis through December 19, 2010. Upon expiration of this
agreement, we expect to continue to generate advertising revenues by providing paid-search advertising on AOL Properties, either through the
continuation of our relationship with Google or an agreement with another search provider.
We view our subscription access service, which we offer to consumers in the United States for a monthly fee, as a valuable distribution
channel for AOL Properties. In general, subscribers to our subscription access service are among the most engaged consumers on AOL
Properties. However, our access service subscriber base has declined and is expected to continue to decline. This decline is the result of several
factors, including the increased availability of high-speed broadband Internet connections, the optimization of a significant amount of online
content, products and services for use with broadband Internet connections, the effects of our strategic focus on advertising, which has led to
significantly reduced marketing efforts for our subscription access service, and the free availability of the vast majority of our content, products
and services. See Item 1ARisk FactorsRisks Relating to Our BusinessOur strategic shift to an online advertising-supported business
model involves significant risks in our Annual Report. As our subscriber base declines, we need to maintain the engagement of former
subscribers and increase the number and engagement of other consumers on AOL Properties. We seek to do this by developing and offering
engaging content, products and services. Further, we have transitioned and will continue to seek to transition a substantial percentage of those
access subscribers who are terminating their paid access subscriptions to free AOL Properties offerings. One of the metrics we monitor related to
our subscription access service is monthly average churn, which represents on average the number of AOL-brand access subscribers that
terminate or cancel our services each month, factoring in new and reactivated subscribers. The domestic AOL-brand access subscriber monthly
average churn was 3.0% and 3.7% for the three months ended March 31, 2010 and 2009, respectively. The average paid tenure of the remaining
domestic AOL-brand access subscribers has been increasing, and was approximately 9.1 years and 7.8 years as of the three months ended
March 31, 2010 and 2009, respectively.
Historically, our primary subscription service has been our subscription access service. Moving forward, we seek to market new products
and services that are either owned by us or by third parties. To facilitate this goal, in 2010 we launched the initial phase of a single, open,
consumer-facing platform that will allow us to manage and distribute these additional products as well as our subscription access service. We
plan to offer those products to our access subscribers and to other Internet consumers. Revenue related to these product offerings was not
material for the three months ended March 31, 2010.
For the three months ended March 31, 2010 and 2009, our subscription revenues were $282.7 million and $393.5 million, respectively. Our
subscription revenues have relatively low direct costs, and accordingly, our subscription access service represents the source of the vast majority
of our operating income. Although our subscription revenues have declined and are expected to continue to decline, we believe that our
subscription access service will continue to provide us with an important source of revenue and cash flow in the near term.
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The revenue and cash flow generated from our subscription access service will help us to pursue our strategic initiatives and continue the
transition of our business toward attracting and engaging Internet consumers and generating advertising revenues. We expect our total revenues
and operating income to decline in the near term and foreseeable future, even if our strategy is successful and we are able to grow our advertising
revenues, primarily due to the continuing decline in our subscriber base.
Third Party Network
We also generate advertising revenues through the sale of advertising on third party websites and on digital devices, which we collectively
refer to as the Third Party Network. Our advertising offerings on the Third Party Network consist primarily of the sale of display advertising.
In order to generate advertising revenues on the Third Party Network, we have historically had to incur higher traffic acquisition costs (TAC) as
compared to advertising on AOL Properties. We currently market our offerings to publishers under the brand Advertising.com.
A significant portion of our revenues on the Third Party Network is generated from the advertising inventory acquired from a limited
number of publishers. We plan to expand the Third Party Network in order to allow us to serve many more publishers and advertisers than at
present.
In the fourth quarter of 2009, we began proactively de-emphasizing the search engine campaign management and lead generation affiliate
products on the Third Party Network in order to focus and strengthen our efforts in display advertising solutions. Given the relatively high level
of direct costs associated with these products, we do not believe that this change will have a significant adverse impact on operating income in
2010.
Trends, Challenges and Uncertainties Impacting Our Business
The web services industry is highly competitive and rapidly changing. Trends, challenges and uncertainties that may have a significant
impact on our business, our opportunities and our ability to execute our strategy include the following:
Commerce, information and advertising continue to migrate to the Internet and away from traditional media outlets. We believe this
continuing trend will create strategic growth opportunities for us to attract new consumers and develop new and effective advertising
solutions.
We believe that effectively aligning our organizational structure and costs to our strategy is an important challenge to the successful
implementation of our strategic plan. We are in the midst of a significant restructuring plan which began in 2009 and we expect to
complete in 2010, which includes the reduction of a significant portion of our workforce. As part of this initiative, we expect to
continue to actively manage our costs, in order to realize the desired benefits of our strategic plan. Additionally, as a part of the
restructuring efforts that we began in 2009, we restructured our advertising organization. This resulted in the reassignment of a
majority of our advertising accounts. We believe that these changes to our advertising organization will continue to have a negative
impact on our advertising revenues throughout 2010.
We have made and are exploring making additional changes to our content, products and services designed to enhance the consumer
experience ( e.g. , fewer advertisements on certain AOL Properties). These changes have involved and may continue to involve the
elimination or modification of advertising practices that historically have been a source of revenues. These enhancements to the
consumer experience are intended to ultimately increase our revenues by increasing the attractiveness
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of our content, product and service offerings to consumers and therefore their value to advertisers. Specifically, we have undertaken
efforts on certain AOL Properties to reduce the number of display advertising units, reduce monetization of search results and reduce
the number of contextual advertising links. While difficult to quantify, we believe that these changes will have a negative impact on
our advertising revenues in the near term, but we do not believe this impact will be significant.
As the amount of content that is available online continues to expand, consumers are increasingly fragmenting across the Internet.
While this fragmentation may result in fewer consumers utilizing portals for their information consumption, we own a large variety
of niche sites ( e.g. Engadget, Lemondrop and PoliticsDaily) that we expect to continue to drive consumer engagement. Furthermore,
the Third Party Network, which reaches thousands of websites, will allow us to continue to provide advertising solutions across a
fragmenting Internet environment.
There has been a significant shift in the method of Internet access away from dial-up access. This is due to a number of factors,
including the increased availability of high-speed broadband Internet connections and the fact that a significant amount of online
content, products and services has been optimized for use with broadband Internet connections. This trend has contributed and we
expect it will continue to contribute to the decline in the number of our access subscribers.
Audience Metrics
We utilize unique visitor numbers to evaluate the performance of AOL Properties and AOL Media. 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. AOLs unique visitor numbers also include unique
visitors attributable to co-branded websites owned by third parties for which certain criteria have been met, including that the Internet traffic has
been assigned to us.
The source for our unique visitor information is a third party (comScore Media Metrix, or Media Metrix). Media Metrix has historically
estimated unique visitors based on a sample of Internet users in various countries (referred to as the panel-only methodology). 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 Metrixs 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.
In 2009, Media Metrix announced the availability of an alternate panel-centric hybrid methodology (Media Metrix 360) to estimate
unique visitors, in order to provide a more accurate count of a websites audience. Media Metrix has implemented this new methodology
domestically and, currently, in limited countries globally. We elected to adopt this alternate methodology for our average monthly unique
visitors to AOL Properties and AOL Media starting in December 2009 and going forward. As a result, our average monthly unique visitors to
AOL Properties and AOL Media based on Media Metrix 360 will not be comparable to the data under the previous panel-only methodology. For
comparison purposes, domestic average monthly unique visitors to AOL Properties and AOL Media are reported under both the Media Metrix
360 and panel-only methodology for the three months ended March 31, 2010.
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The following table presents our unique visitor metrics for the periods presented (in millions):
Three Months Ended March 31,
2010
2009
Domestic average monthly unique visitors to AOL Properties (Media Metrix 360)
Domestic average monthly unique visitors to AOL Properties (Panel-only methodology)
Domestic average monthly unique visitors to AOL Media (Media Metrix 360)
Domestic average monthly unique visitors to AOL Media (Panel-only methodology)
Domestic average monthly unique visitors to AOL Advertising Network
112
100
NA
106
86
73
NA
70
186
174
Recent Developments
Sale of Perfiliate Limited (doing business as buy.at)
On February 26, 2010, we completed the sale of buy.at to Digital Window Limited for approximately $16.4 million in net cash. We
recorded a pre-tax loss on this sale of $17.7 million (on an after-tax basis, the loss was $6.1 million), calculated as the excess of the carrying
value of the net assets sold (including goodwill allocated to the sale of $12.6 million) over the cash proceeds. The financial condition, results of
operations and cash flows of buy.at have been reflected as discontinued operations for all periods presented. The results of operations of buy.at
were not material to our consolidated financial statements. See Note 3 in our accompanying consolidated financial statements for additional
information on our sale of buy.at.
Acquisition of StudioNow
On January 22, 2010, we completed the acquisition of StudioNow, Inc. (StudioNow), a provider of a proprietary digital platform that
allows clients to create, produce, manage and distribute professional quality videos at scale, for a purchase price of $32.1 million (excluding $3.1
million payable to certain StudioNow employees two years after the closing date and contingent on their future service). $14.1 million of the
consideration was paid through the issuance of 594,749 shares of AOL common stock valued as of the closing date. Of the remaining $18.0
million, $14.0 million was paid in cash at the closing date and $4.0 million reflects the present value of the cash consideration due two years
after the closing date. The results of operations of StudioNow from the acquisition date through March 31, 2010 were not material to our
consolidated financial statements. See Note 3 in our accompanying consolidated financial statements for additional information on our
acquisition of StudioNow.
Sale of ICQ Operations
On April 28, 2010, we entered into an agreement for the sale of our ICQ operations for $187.5 million in cash (subject to working capital
adjustments). The sale is expected to close in the third quarter of 2010, subject to regulatory and other customary approvals in Russia and
Ukraine. ICQ provides online instant messaging services and products, as well as software related to such services and products, primarily to
international online consumers.
Restructuring Actions
We are in the midst of a significant restructuring initiative which began late in 2009 and we expect to complete in 2010. We are on track to
reduce our total workforce by nearly one-third in connection with this
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restructuring initiative, prior to hiring of new employees in areas of strategic focus. As part of this initiative, we plan to reduce our cost base in
the United Kingdom and cease or reduce operations in a number of other countries. In the first quarter of 2010, we initiated steps to significantly
reduce our operations in France and Germany and cease operations in a number of other countries. In connection with these restructuring
activities, we incurred $23.4 million of restructuring expense during the three months ended March 31, 2010 and expect to incur additional
restructuring charges of up to $25.0 million during the remainder of 2010. As a result of ceasing operations in various international countries and
shutting down legal entities in certain countries where we operate, we incurred a non-cash loss of $1.1 million related to the recognition, in other
loss, net, of a portion of our cumulative foreign currency translation adjustments accumulated in other comprehensive income. As we continue to
cease operations in certain international locations and shut down legal entities, we may incur significant additional non-cash losses related to the
recognition of our cumulative foreign currency translation adjustments during 2010. Further, we are currently evaluating our strategic
alternatives for our Bebo, Inc. (Bebo) subsidiary, which could include a sale or shutdown of Bebo.
Results of Operations
The results of operations for the three months ended March 31, 2009 have been recast so that the basis of presentation is consistent with
that of the results of operations for the three months ended March 31, 2010. This recast reflects the financial condition, results of operations and
cash flows of buy.at as discontinued operations for all periods presented.
Recent Accounting Standards
See Note 1 in our accompanying consolidated financial statements for a discussion of recent accounting standards.
Consolidated Results
The following table presents our operating results as a percentage of revenues for the periods presented and should be read in conjunction
with the accompanying consolidated statements of operations:
2010
2009
Revenues
Costs and expenses:
Costs of revenues
Selling, general and administrative
Amortization of intangible assets
Amounts related to securities litigation and government investigations, net of
recoveries
Restructuring costs
Total costs and expenses
Operating income
8
100%
100%
55
20
9
56
16
4
4
88%
12%
1
7
84%
16%
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AOL INC.
The following table presents our revenues, by revenue type, for the periods presented (in millions):
2010
2009
Revenues:
Advertising
Subscription
Other
Total revenues
$
$
354.3
282.7
27.3
664.3
$
$
439.8
393.5
30.7
864.0
% Change
(19)%
(28)%
(11)%
(23)%
The following table presents our revenues, by revenue type, as a percentage of total revenues for the periods presented:
2010
2009
Revenues:
Advertising
Subscription
Other
Total revenues
53%
43
4
100%
51%
46
3
100%
Advertising Revenues
Advertising revenues are generated on AOL Properties through display advertising and search and contextual advertising. Display
advertising revenue is generated by the display of graphical advertisements and other performance-based advertising. Search and contextual
advertising revenue is generated when a user clicks on or views a text-based advertisement on the users screen. These text-based advertisements
are either generated from a user-initiated search query or generated based on the content of the webpage the user is viewing. Agreements for
advertising on AOL Properties typically take the form of impression-based contracts in which we provide impressions in exchange for a fixed
fee (generally stated as cost-per-thousand impressions), time-based contracts in which we provide a minimum number of impressions over a
specified time period for a fixed fee or performance-based contracts in which performance is measured in terms of either click-throughs when
a user clicks on a companys advertisement or other user actions such as product/customer registrations, survey participation, sales leads or
product purchases. In addition, agreements with advertisers can include other advertising-related elements such as content sponsorships,
exclusivities or advertising effectiveness research.
In addition to advertising revenues generated on AOL Properties, we also generate revenues from our advertising offerings on the Third
Party Network. To generate revenues on the Third Party Network, we purchase advertising inventory from publishers (both large and small) in
the Third Party Network using proprietary optimization, targeting and delivery technology to best match advertisers with available advertising
inventory. Advertising arrangements for the sale of Third Party Network inventory typically take the form of impression-based contracts or
performance-based contracts.
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Advertising revenues on AOL Properties and the Third Party Network for the three months ended March 31, 2010 and 2009 are as follows
(in millions):
2010
2009
AOL Properties:
Display
Search and Contextual
Total AOL Properties
Third Party Network
Total advertising revenues
125.6
120.7
246.3
108.0
354.3
143.8
165.7
309.5
130.3
439.8
% Change
(13)%
(27)%
(20)%
(17)%
(19)%
Advertising revenues generated on AOL Properties decreased 20%, or $63.2 million, for the three months ended March 31, 2010, as
compared to the three months ended March 31, 2009, driven by decreases in domestic and international display advertising and search and
contextual revenues. The decrease in domestic display advertising was due to the impact of our restructuring efforts on the display advertising
organization and a lower volume of our display inventory monetized through the Third Party Network. Domestic display advertising was further
impacted by an approximate $4 million reduction in revenue from legacy advertising deals in certain commerce and content areas that have been
de-emphasized. International display revenue decreases of $6.4 million were due to our restructuring efforts in the United Kingdom, continued
declines from Bebo and reduced operations in France and Germany. The decline in search and contextual revenues was primarily due to
decreases in search query volume on certain AOL Properties, partially due to the decline in domestic AOL-brand access subscribers, and a
reduction in contextual links.
For the periods presented in this Quarterly Report, we have had a contractual relationship with Google whereby we generate revenues
through paid text-based search and contextual advertising on AOL Properties provided by Google, which represent a significant percentage of
the advertising revenues generated by AOL Properties. For the three months ended March 31, 2010 and 2009, the revenues associated with the
Google relationship (substantially all of which were search and contextual revenues generated on AOL Properties) were $116.4 million and
$148.0 million, respectively.
Advertising revenues on the Third Party Network decreased 17% for the three months ended March 31, 2010, as compared to the three
months ended March 31, 2009. This decline is primarily due to a decrease of $9.5 million as a result of ceasing operations in a number of
European countries and, to a lesser extent, our reduced operations in the United Kingdom and Germany. Additionally, in the fourth quarter of
2009 we proactively de-emphasized the search engine campaign management and lead generation affiliate products in order to focus and
strengthen our efforts in display advertising solutions. This resulted in a decline related to these products for the three months ended March 31,
2010 of $13.8 million as compared to the prior period.
We expect that our advertising revenues on both AOL Properties and the Third Party Network will continue to decline significantly for the
remainder of 2010 as compared to the same periods in 2009. We believe that advertising revenues generated on AOL Properties will be
negatively impacted by the restructuring of our advertising organization, the decline in our domestic AOL-brand access subscribers, particularly
as it relates to search and contextual revenues, and our plan to cease or reduce operations in a number of countries. Visibility into advertising
revenue for the full year of 2010 is limited due to the impact of the restructuring of our advertising organization, mentioned above, and the fact
that many advertising agreements are executed during the quarter that the advertising is displayed. Finally, we expect our Third Party Network
revenues will be
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AOL INC.
negatively impacted for the remainder of 2010 by the international reductions and closures previously discussed as well as the de-emphasis of
our search engine campaign management and lead generation affiliate products, which are discussed in OverviewOur BusinessThird Party
Network above.
Subscription Revenues
The 28% decline in subscription revenues for the three months ended March 31, 2010, as compared to the three months ended March 31,
2009, was due to an approximate 26% decrease in the number of domestic AOL-brand access subscribers (which is discussed further below).
The number of domestic AOL-brand access subscribers was 4.7 million and 6.3 million at March 31, 2010 and March 31, 2009,
respectively. The domestic average monthly revenue per AOL-brand access subscriber (which we refer to in this Quarterly Report as ARPU)
was $18.31 and $18.48 for the three months ended March 31, 2010 and 2009, respectively. We include in our subscriber numbers individuals,
households and entities that have provided billing information and completed the registration process sufficiently to allow for an initial log-on to
the AOL access service. Individuals who have registered for our free offerings, including subscribers who have migrated from paid subscription
plans, are not included in the AOL-brand access subscriber numbers presented above. Subscribers to our subscription access service contribute to
our ability to generate advertising revenues.
As previously discussed, the continued decline in domestic AOL-brand access subscribers is the result of several factors, including the
increased availability of high-speed broadband Internet connections, the fact that a significant amount of online content, products and services
has been optimized for use with broadband Internet connections and the effects of our strategic focus on advertising, which has led to
significantly reduced marketing efforts for our subscription access service and the free availability of the vast majority of our content, products
and services. As a result of these factors, we expect subscription revenues to continue to decline for the foreseeable future.
Other Revenues
Other revenues consist primarily of fees associated with our mobile e-mail and instant messaging functionality from mobile carriers,
licensing revenues from third-party customers through MapQuests business-to-business services and licensing revenues from licensing our
proprietary ad serving technology to third parties through our subsidiary, ADTECH AG.
Other revenues decreased 11% for the three months ended March 31, 2010, as compared to the three months ended March 31, 2009, due to
a decrease of approximately $5.0 million reflecting the timing of fees earned from mobile carriers associated with our mobile e-mail and instant
messaging functions.
Geographical Concentration of Revenues
For the periods presented herein, a significant majority of our revenues have been generated in the United States. For the three months
ended March 31, 2010 and 2009, 90% and 89%, respectively, of our revenues were generated in the United States. Substantially all of the nonUnited States revenues for these periods were generated by our European operations (primarily in the United Kingdom, France and Germany).
We expect the significant majority of our revenues to continue to be generated in the United States for the foreseeable future. See Note 1 in
our accompanying consolidated financial statements for further discussion of our geographical concentrations.
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AOL INC.
Operating Costs and Expenses
The following table presents our operating costs and expenses for the periods presented (in millions):
2010
2009
Costs of revenues
Amounts related to securities litigation and government investigations, net of
recoveries
Restructuring costs
364.7
133.3
62.2
23.4
% Change
484.2
137.4
34.8
(25)%
(3)%
79%
7.4
58.3
(100)%
(60)%
Costs of Revenues
The following categories of costs are generally included in costs of revenues: network-related costs, TAC, product development costs and
other costs of revenues. The largest component of our costs of revenues is generally TAC, which consists of costs incurred through arrangements
in which we acquire third-party online advertising inventory for resale and arrangements whereby partners distribute our free products or
services or otherwise direct traffic to AOL Properties. TAC arrangements have a number of different economic structures, the most common of
which are: payments based on a cost-per-thousand impressions or based on a percentage of the ultimate advertising revenues generated from the
advertising inventory acquired for resale, payments for direct traffic delivered to AOL Properties priced on a per click basis ( e.g. , search engine
marketing fees) and payments to partners in exchange for distributing our products to their users ( e.g. , agreements with computer manufacturers
to distribute our toolbar or a co-branded web portal on computers shipped to end users). These arrangements can be on a fixed-fee basis (which
often carry reciprocal performance guarantees by the counterparty), on a variable basis or, in some cases, a combination of the two.
Costs of revenues decreased 25% to $364.7 million for the three months ended March 31, 2010, as compared to $484.2 million for the
three months ended March 31, 2009. The primary drivers of the decrease in costs of revenues were decreases in TAC, network-related costs and
personnel costs. TAC decreased by $43.7 million, or 33%, for the three months ended March 31, 2010, as compared to $132.9 million for the
three months ended March 31, 2009. This decrease was due to a decline from a significant product distribution agreement, whereby payments
previously were based on the number of personal computers shipped. Under the agreement, which was amended during the three months ended
March 31, 2010, new distributions have ceased and payments will be based on a percentage of the advertising revenue we earn on the associated
co-branded website. As a result, TAC associated with this agreement declined by $21.3 million. TAC was also impacted by the decrease in
advertising revenues which drove a decline of $20.9 million in variable revenue share payments to our publishing partners. Network-related
costs declined by $24.6 million for the three months ended March 31, 2010, due to declines in narrowband network and other network-related
costs related to cost reduction initiatives, partially due to the decline in domestic AOL-brand access subscribers. Personnel costs, including
salaries and bonuses, declined by $41.3 million due to reduced headcount as a result of our 2009 restructuring initiatives.
Selling, General and Administrative
Selling, general and administrative expenses decreased 3% to $133.3 million for the three months ended March 31, 2010, as compared to
$137.4 million for the three months ended March 31, 2009, due to declines in personnel costs of $7.9 million as a result of our 2009 restructuring
initiatives, partially offset by an increase in equity-based compensation expense.
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AOL INC.
Amortization of Intangible Assets
Amortization of intangible assets results primarily from acquired intangible assets including technology, customer relationships and trade
names. Amortization of intangible assets increased 79% to $62.2 million for the three months ended March 31, 2010, as compared to $34.8
million for the three months ended March 31, 2009, due to our reevaluation of the useful lives of certain intangible assets in the fourth quarter of
2009 in connection with our restructuring initiative, which resulted in incremental amortization expense of $32.9 million in the first quarter of
2010.
Amounts Related to Securities Litigation and Government Investigations, Net of Recoveries
Amounts related to securities litigation and government investigations, net of recoveries consist of legal settlement costs and legal and
other professional fees incurred by Time Warner prior to the spin-off related to the defense of various securities lawsuits involving us or our or
Time Warners present or former officers and employees. While these amounts were historically incurred by Time Warner and reflected in Time
Warners financial results, they have been reflected as an expense and a corresponding additional capital contribution by Time Warner in our
consolidated financial statements for the periods when we were a wholly-owned subsidiary of Time Warner because they involve us. We
recognized $7.4 million of expense related to these matters for the three months ended March 31, 2009. Following the spin-off, these costs
continue to be incurred by Time Warner to the extent that proceeds from a settlement with insurers are available to pay those costs, and
thereafter AOL has an obligation to indemnify Time Warner for such costs to the extent they are associated with present or former officers and
employees of AOL. We do not view our remaining potential obligation related to this matter to be material.
Restructuring Costs
In connection with our restructuring initiatives, we incurred restructuring costs of $23.4 million and $58.3 million for the three months
ended March 31, 2010 and 2009, respectively, related to voluntary and involuntary employee terminations and facility closures. We expect to
incur additional restructuring costs of up to $25.0 million during the remainder of 2010 in connection with these restructuring initiatives.
Operating Income
Operating income decreased 43% to $80.7 million for the three months ended March 31, 2010, as compared to $141.9 million for the three
months ended March 31, 2009, driven by the decline in revenues and increase in amortization expense, partially offset by decreases in costs of
revenues and restructuring costs.
Other Income Statement Amounts
The following table presents our other income statement amounts for the periods presented (in millions):
2010
2009
Other loss, net

Income tax provision
Discontinued operations, net of tax
13
(2.7)
36.8
(6.5)
(3.1)
56.3
% Change
(13)%
(35)%
NM
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AOL INC.
Income Tax Provision
Our effective tax rate for income from continuing operations was 47.2% for the three months ended March 31, 2010, as compared to
40.6% for the three months ended March 31, 2009, due primarily to the change in foreign deferred tax assets that are subject to a valuation
allowance and the expiration of the U.S. federal research & experimentation tax credit. The effective tax rate for the three months ended
March 31, 2010 differs from the statutory U.S. federal income tax rate of 35.0% due primarily to foreign deferred tax assets generated during the
three months ended March 31, 2010 that are subject to a valuation allowance and state income taxes, net of the federal income tax benefit.
For the three months ended March 31, 2010 and 2009, we recorded an income tax benefit on discontinued operations of $11.7 million and
$0.3 million, respectively. The income tax benefit for the three months ended March 31, 2010 included a benefit of $11.6 million related to the
loss incurred on the sale of buy.at. See Note 3 in our accompanying consolidated financial statements for additional information on the sale of
buy.at.
Discontinued Operations, Net of Tax
The financial results for the three months ended March 31, 2010 and 2009 include the impact of reflecting the results of operations,
financial condition and cash flows of buy.at as discontinued operations. The three months ended March 31, 2010 included the results of buy.at
for the period from January 1, 2010 through the sale date of February 26, 2010 and the loss on the sale of buy.at. See Note 3 in our
accompanying consolidated financial statements for more information regarding this divestiture.
Liquidity and Capital Resources
Current Financial Condition
Historically, the cash we generate has been sufficient to fund our working capital, capital expenditure and financing requirements. While
our ability to forecast future cash flows is limited, we expect to fund our ongoing working capital, capital expenditure and financing
requirements primarily through cash flows from operations. In addition, we have available to us the $250 million senior secured revolving credit
facility (the Revolving Credit Facility) entered into in connection with the spin-off. See Principal Debt Obligations for additional
information on the Revolving Credit Facility. While we expect to continue to generate positive cash flows from operations, we expect our cash
flows from operations to decline over the next several years principally due to the continued decline in the number of domestic AOL-brand
access subscribers as well as a projected decline in search and contextual advertising revenues. Growth in cash flows from operations will only
be achieved when, and if, the growth in earnings from our online advertising services more than offsets the continued decline in domestic AOLbrand access subscribers. In order for us to achieve such increase in earnings from advertising services, we believe it will be important to
increase our overall volume of display advertising sold, including through our higher-priced channels, and to maintain or increase pricing for
advertising. Advertising revenues, however, are more unpredictable and variable than our subscription revenues, and are more likely to be
adversely affected during economic downturns, as spending by advertisers tends to be cyclical in line with general economic conditions. If we
are unable to successfully implement our strategic plan and grow the earnings generated by our online advertising services, we would reassess
our cost structure or seek other financing alternatives to fund our business. As part of our ongoing assessment of our business and availability of
capital and to enhance our liquidity position, we have divested of certain assets and product lines and may consider divesting of additional assets
or product lines.
At March 31, 2010, our cash and equivalents totaled $262.4 million, as compared to $146.1 million at December 31, 2009.
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AOL INC.
Summary Cash Flow Information
Our cash flows from operations are driven by net income adjusted for non-cash items such as depreciation, amortization, goodwill
impairment, equity-based compensation expense and other activities impacting net income such as the gains and losses on the sale of assets or
operating subsidiaries. Cash flows from investing activities consist primarily of the cash used in the acquisitions of various businesses as part of
our strategy, proceeds received from the sale of assets or operating subsidiaries and cash used for capital expenditures. Cash flows from
financing activities prior to the spin-off relate primarily to our distributions of cash to Time Warner as part of our historical cash management
and treasury operations and for all periods, payments made on debt and capital lease obligations.
Operating Activities
The following table presents cash provided by operations for the periods presented (in millions):
2010
2009
Net income
Less: Discontinued operations, net of tax
Net income from continuing operations
Adjustments for non-cash and non-operating items:
Depreciation and amortization
Non-cash asset impairments
Non-cash equity-based compensation
Amounts related to securities litigation and government investigations, net of recoveries
Deferred income taxes
All other, net, including working capital changes
Cash provided by continuing operations
34.7
(6.5)
41.2
116.5
1.4
9.7
(16.8)
10.9
162.9
82.5
82.5
103.4
2.3
6.2
7.4
114.8
316.6
Cash provided by continuing operations decreased by $153.7 million to $162.9 million for the three months ended March 31, 2010, as
compared to the three months ended March 31, 2009. Our operating income was $80.7 million for the three months ended March 31, 2010, a
decrease of $61.2 million as compared to the three months ended March 31, 2009. This decrease in operating income along with the decrease in
cash provided by changes in working capital drove the decline in cash provided by continuing operations. The decrease in cash provided by
working capital was due primarily to cash payments in 2010 for employee bonus costs and restructuring costs incurred in 2009.
Investing Activities
The following table presents cash used by investing activities for the periods presented (in millions):
2010
2009
Investments and acquisitions, net of cash acquired

Capital expenditures and product development costs
Investment activities from discontinued operations
Other investment proceeds
Cash used by investing activities
$
15
(23.2)
(29.5)
16.4
1.0
(35.3)
(7.8)
(31.1)
(0.5)
0.2
(39.2)
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AOL INC.
Cash used by investing activities decreased by $3.9 million to $35.3 million for the three months ended March 31, 2010, as compared to
the three months ended March 31, 2009, due to the proceeds received in the three months ended March 31, 2010 from the sale of buy.at and a
decrease in capital expenditures and product development costs, partially offset by an increase in cash used for acquisitions.
Capital expenditures and product development costs are mainly for the purchase of computer hardware, software, network equipment,
furniture, fixtures and other office equipment.
Financing Activities
The following table presents cash used by financing activities for the periods presented (in millions):
2010
2009
Principal payments on capital leases

Net distribution to Time Warner
Other
Cash used by financing activities
$
$
(8.3)
(8.3)
$
$
(7.2)
(282.9)
(2.2)
(292.3)
Cash used by financing activities was $8.3 million for the three months ended March 31, 2010, compared to $292.3 million for the three
months ended March 31, 2009. This change was due to the $282.9 million of net cash distributed to Time Warner in the three months ended
March 31, 2009, as we swept the majority of our domestic cash to Time Warner prior to the spin-off.
Principal Debt Obligations
On December 9, 2009, in connection with the spin-off, we entered into the Revolving Credit Facility, which we intend to use, as necessary,
for general corporate purposes. Time Warner has guaranteed all of our obligations under the Revolving Credit Facility, pursuant to a guarantee
dated as of December 9, 2009. The maturity date of the Revolving Credit Facility is December 8, 2010. Loans made under the Revolving Credit
Facility will bear interest at a fluctuating rate based on the applicable rating for the senior unsecured long-term debt of Time Warner. From
December 9, 2009 (the date of the spin-off) through April 28, 2010, we have not borrowed under the terms of the Revolving Credit Facility. See
Note 5 to our audited consolidated financial statements in our Annual Report for additional information.
Customer Credit Risk
Customer credit risk represents the potential for financial loss if a customer is unwilling or unable to meet its agreed-upon contractual
payment obligations. Credit risk originates from sales of advertising and subscription access service and is dispersed among many different
counterparties. No single customer had a receivable balance at March 31, 2010 greater than 10% of total net receivables. While such
uncollectible amounts have historically been within our expectations and related reserve balances, if there is a significant change in uncollectible
amounts in the future or the financial condition of our counterparties across various industries or geographies deteriorates, these events could
have an adverse impact on our operating results and cash flows.
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AOL INC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the potential gain or loss arising from changes in market rates and prices, which historically, for us, has been associated
primarily with changes in foreign currency exchange rates. We used derivative instruments (principally foreign exchange forward contracts),
which historically were entered into by Time Warner on our behalf, to manage the risk associated with exchange rate volatility. Prior to the spinoff, all outstanding derivative instruments were settled. Subsequent to the spin-off and through March 31, 2010, we have not entered into any
derivative instruments or hedges. While we may enter into derivative instruments or hedges in the future, we do not currently believe our
exposure to foreign exchange risk is significant.
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AOL INC.
ITEM 4T. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that the information we are
required to disclose in our financial reports is recorded, processed, summarized and reported within the time periods specified by the SEC rules
and forms and that such information is accumulated and communicated to senior management, as appropriate, to allow timely decisions
regarding required disclosure. Management is responsible for establishing and maintaining effective disclosure controls and procedures, as
defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended. Our management, with the participation of
our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and
procedures as of March 31, 2010. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were effective as of March 31, 2010, at a reasonable assurance level.
Changes to Internal Control Over Financial Reporting
We have evaluated the changes in our internal control over financial reporting that occurred during the three months ended March 31, 2010
and concluded that there have not been any changes that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
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AOL INC.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; In millions, except per share amounts)
2010
2009
(recast)
Revenues:
Advertising
Subscription
Other
Total revenues
Costs of revenues
Restructuring costs
Operating income
Other loss, net
Income from continuing operations before income taxes
Income tax provision
Income from continuing operations
Net income
Less: Net loss attributable to noncontrolling interests
Net income attributable to AOL Inc.
Amounts attributable to AOL Inc.:
Income from continuing operations
Net income attributable to AOL Inc.
Per share information attributable to AOL Inc. common stockholders:
Basic income per common share from continuing operations
Basic net income per common share
Diluted income per common share from continuing operations
Diluted net income per common share
Shares used in computing basic income per common share
Shares used in computing diluted income per common share
See accompanying notes.

19
$
$
$
$
$
$
$
354.3
282.7
27.3
664.3
364.7
133.3
62.2
23.4
80.7
(2.7)
78.0
36.8
41.2
(6.5)
34.7
34.7
41.2
(6.5)
34.7
0.39
(0.06)
0.33
0.39
(0.07)
0.32
106.3
107.0
$
$
$
439.8
393.5
30.7
864.0
484.2
137.4
34.8
7.4
58.3
141.9
(3.1)
138.8
56.3
82.5
82.5
0.2
82.7
82.7
82.7
0.78
0.78
0.78
0.78
105.8
105.8
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AOL INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)
December 31,
March 31,
2010
(unaudited)
Assets
Current assets:
Cash and equivalents
Accounts receivable, net of allowances of $32.8 and $31.7, respectively
Prepaid expenses and other current assets
Current assets of discontinued operations
Total current assets
Property and equipment, net
Goodwill
Intangible assets, net
Long-term deferred income taxes
Long-term assets of discontinued operations
Other long-term assets
Total assets
Liabilities and Equity
Current liabilities:
Accounts payable
Accrued compensation and benefits
Accrued expenses and other current liabilities
Deferred revenue
Current portion of obligations under capital leases
Current liabilities of discontinued operations
Total current liabilities
Obligations under capital leases
Restructuring liabilities
Long-term liabilities of discontinued operations
Other long-term liabilities
Total liabilities
Commitments and contingencies (See Note 8)
Equity:
Common stock, $0.01 par value, 106.5 million and 105.8 million shares issued and outstanding at
March 31, 2010 and December 31, 2009, respectively
Additional paid-in capital
Accumulated other comprehensive loss, net
Retained earnings (accumulated deficit) for the period subsequent to November 2, 2009
Total AOL Inc. stockholders equity
Noncontrolling interest
Total equity
Total liabilities and equity
20
2009
(recast)
262.4
387.2
39.7
22.4
711.7
678.3
2,184.6
152.4
158.1
33.3
$ 3,918.4
73.9
68.4
389.9
136.5
32.6
701.3
37.6
13.9
4.0
77.2
834.0
1.1
3,357.5
(288.5)
14.3
3,084.4
3,084.4
$ 3,918.4
146.1
440.0
33.1
44.7
23.5
687.4
704.7
2,171.6
210.4
136.8
27.0
25.2
$ 3,963.1
100.4
90.7
400.4
113.5
32.4
14.0
751.4
41.5
28.3
2.4
7.0
69.6
900.2
1.1
3,355.5
(275.1)
(20.4)
3,061.1
1.8
3,062.9
$ 3,963.1
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AOL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; In millions)
2010
2009
(recast)
Operations
Net income
Less: Discontinued operations, net of tax
Net income from continuing operations
Adjustments for non-cash and non-operating items:
Depreciation and amortization
Asset impairments
Equity-based compensation
Other non-cash adjustments
Changes in operating assets and liabilities, net of acquisitions
Cash provided by continuing operations
Cash provided by discontinued operations
Cash provided by operations
Investing Activities
Investments and acquisitions, net of cash acquired
Capital expenditures and product development costs
Investment activities from discontinued operations
Other investment proceeds
Cash used by investing activities
Financing Activities
Principal payments on capital leases
Net distribution to Time Warner
Other
Cash used by financing activities
Effect of exchange rate changes on cash and equivalents
Increase (decrease) in cash and equivalents
Cash and equivalents at beginning of period
Cash and equivalents at end of period
Less: Cash and equivalents of discontinued operations at end of period
Cash and equivalents of continuing operations at end of period
Supplemental disclosures of cash flow information
Cash paid for interest
Cash paid for taxes
$
$
$

21
34.7
(6.5)
41.2
82.5
82.5
116.5
1.4
9.7
1.2
(16.8)
9.7
162.9
0.2
163.1
103.4
2.3
6.2
7.4
9.7
105.1
316.6
0.3
316.9
(23.2)
(29.5)
16.4
1.0
(35.3)
(7.8)
(31.1)
(0.5)
0.2
(39.2)
(8.3)
(8.3)
(7.2)
(282.9)
(2.2)
(292.3)
(4.1)
115.4
147.0
262.4
262.4
(1.3)
(15.9)
134.7
118.8
(0.3)
119.1
1.3
1.5
$
$
$
1.0
0.8
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AOL INC.
CONSOLIDATED STATEMENTS OF EQUITY
Three Months Ended March 31, 2010 and 2009
(Unaudited; In millions)
Common Stock
Shares
Balance at December 31, 2008

Net income (loss)
Unrealized gains on derivatives and
investments, net of tax
Foreign currency translation
adjustments
Comprehensive income (loss)
Net transactions with Time Warner
Balance at March 31, 2009
Balance at December 31, 2009
Net income
Foreign currency translation
adjustments
Comprehensive income (loss)
Deconsolidation of non-controlling
interest
Spin-off deferred tax adjustment (See
Note 5)
Issuance of common stock in connection
with acquisitions
Amounts related to equity-based
compensation
Balance at March 31, 2010
Amount
Additional
Divisional
Equity
Paid-In
Capital
$4,038.6
82.7
82.7
(317.9)
$3,803.4
105.8
$ 1.1
Accumulated
Other
Comprehensive
Retained
Earnings
(Accumulated
NonControlling
Income (Loss)
Deficit)
Interest
(302.4)
1.5
(0.2)
Total
Equity
$3,737.7
82.5
0.4
(9.0)
(8.6)
(0.2)
`
1.3
(9.0)
73.9
(317.9)
$3,493.7
1.8
$3,062.9
34.7
$3,355.5
(311.0)
(275.1)
(20.4)
34.7
0.4
(13.4)
(13.4)
34.7
(1.8)
(25.9)
(25.9)
0.7
18.2
18.2
9.7
$3,357.5
9.7
$3,084.4
106.5
$ 1.1

22
(288.5)
14.3
(13.4)
21.3
(1.8)
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AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Description of Business
For a description of the business of AOL Inc. (AOL or the Company) see Note 1 to the Companys audited consolidated financial
statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2009 (the Annual Report).
The Spin-Off
On December 9, 2009, we completed our legal and structural separation from Time Warner Inc. (Time Warner) via a spin-off (the spinoff). In the spin-off, Time Warner shareholders of record as of 5 p.m. on November 27, 2009, the record date for the distribution, received one
share of AOL common stock for every eleven shares of Time Warner common stock held. On December 10, 2009, AOL began trading on the
New York Stock Exchange as an independent, public company.
Basis of Presentation
Changes in Basis of Presentation
The interim consolidated financial statements for 2009 have been recast so that the basis of presentation is consistent with that of the
interim consolidated financial statements for 2010. This recast reflects the financial condition, results of operations and cash flows of Perfiliate
Limited (doing business as buy.at) as discontinued operations for all periods presented.
Basis of Consolidation
The consolidated financial statements include 100% of the assets, liabilities, revenues, expenses and cash flows of AOL, all voting interest
entities in which AOL has a controlling voting interest (subsidiaries), and those variable interest entities for which AOL is the primary
beneficiary in accordance with the consolidation accounting guidance. Through the date of the spin-off, these financial statements present the
historical consolidated results of operations, financial position, and cash flows of the AOL business that now comprises the operations of the
Company. Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation. Prior to the spin-off,
AOL was a subsidiary of Time Warner. The financial information prior to the spin-off may not necessarily reflect AOLs financial position,
results of operations and cash flows in the future or what AOLs financial position, results of operations and cash flows would have been had
AOL been an independent, publicly-traded company.
Through the date of the spin-off, the consolidated financial statements include allocations of certain Time Warner corporate expenses.
Management believes the assumptions and methodologies underlying the allocation of general corporate overhead expenses are reasonable.
However, such expenses may not be indicative of the actual level of expense that would have been incurred by AOL if it had operated as an
independent, publicly-traded company or of the costs expected to be incurred in the future. These allocated expenses relate to various services
that were provided to AOL by Time Warner, including cash management and other treasury services, administrative services (such as
government relations, tax, employee benefit administration, internal audit, accounting and human resources), equity-based compensation plan
administration, aviation services, insurance coverage and the licensing of certain third-party patents. See Note 13 to the Companys audited
consolidated financial statements included in the Annual Report for further information regarding the allocation of Time Warner corporate
expenses and the ongoing relationship with Time Warner.
23
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AOL INC.
The financial position and operating results of substantially all foreign operations are consolidated using the local currency as the
functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency
revenues and expenses are translated at average rates of exchange during the period. Resulting translation gains or losses are included in the
consolidated balance sheet as a component of accumulated other comprehensive income (loss), net.
Use of Estimates
The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires
management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and
footnotes thereto. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the consolidated financial
statements include accounting for asset impairments, reserves established for doubtful accounts, equity-based compensation, depreciation and
amortization, business combinations, income taxes, litigation matters and contingencies.
Interim Financial Statements
The interim consolidated financial statements are unaudited; however, in the opinion of management, they contain all the adjustments
(consisting of those of a normal recurring nature) considered necessary to present fairly the financial position, the results of operations and cash
flows for the periods presented in conformity with GAAP applicable to interim periods. The interim consolidated financial statements should be
read in conjunction with the audited consolidated financial statements of AOL in the Annual Report.
Information about Geographical Areas
Revenues in different geographical areas are as follows (in millions):
Three Months Ended March 31, (a)
2010
2009
United States
United Kingdom
Germany
France
Canada
Other international
Total international
Total
(a)
596.5
30.8
13.7
11.5
9.2
2.6
67.8
664.3
767.6
40.4
14.7
18.2
8.0
15.1
96.4
864.0
Revenues are attributed to countries based on the location of customers.
Recent Accounting Standards

Variable Interest Entities
In June 2009, new guidance was issued which requires an enterprise to perform an analysis to determine whether the enterprises variable
interest or interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable
interest entity as the enterprise that has (i) the power to direct the activities of a variable interest entity that most significantly impact the entitys
economic
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AOL INC.
performance and (ii) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to
receive benefits from the entity that could potentially be significant to the variable interest entity. In addition, this guidance amends the
accounting for variable interest entities to (i) require ongoing assessments of whether an entity is the primary beneficiary of a variable interest
entity, (ii) eliminate the quantitative approach for determining the primary beneficiary of a variable interest entity, (iii) amend certain guidance
for determining whether an entity is a variable interest entity and (iv) require enhanced disclosures. This guidance became effective for AOL on
January 1, 2010 and as a result of applying this guidance, the Company deconsolidated an international joint venture on January 1, 2010. This
deconsolidation did not have a material impact on the Companys consolidated financial statements.
Amendments to Revenue Arrangements with Multiple Deliverables
In October 2009, new guidance was issued related to the accounting for multiple-deliverable revenue arrangements. This new guidance
amends the existing guidance for separating consideration in multiple deliverable arrangements and establishes a selling price hierarchy for
determining the selling price of a deliverable. This new guidance will become effective for AOL on January 1, 2011 with earlier application
permitted, provided that the revised guidance is retroactively applied to the beginning of the year of adoption. The Company is currently
evaluating the timing of adopting this new guidance and the impact that the adoption of this new guidance will have on the Companys revenue
recognition policies and results of operations.
NOTE 2INCOME PER COMMON SHARE
Basic income per common share is calculated by dividing net income attributable to AOL common stockholders by the weighted average
number of shares of common stock issued and outstanding during the reporting period. Diluted income per common share is calculated to give
effect to all potentially dilutive common shares that were outstanding during the reporting period. The dilutive effect of outstanding equity-based
compensation awards is reflected in diluted income per common share by application of the treasury stock method.
On November 2, 2009, the Company converted from AOL Holdings LLC, a limited liability company wholly owned by Time Warner, to
AOL Inc., a corporation wholly owned by Time Warner. On the distribution date of December 9, 2009, 105.8 million shares of $0.01 par value
AOL common stock were distributed to Time Warner shareholders of record as of 5 p.m. on November 27, 2009. This share amount is being
utilized for the calculation of basic and diluted income per common share for the three months ended March 31, 2009 as no common stock of the
Company existed prior to November 2, 2009 and no dilutive securities of the Company were outstanding during the three months ended
March 31, 2009.
The following table is a reconciliation of basic and diluted income per common share from continuing operations (in millions, except per
share amounts):
2010
2009
Net income attributable to AOL Inc. common stockholders

Shares used in computing basic income per common share
Dilutive effect of equity-based awards
Shares used in computing diluted income per common share
Basic net income per common share
Diluted net income per common share
$
$
25
34.7
106.3
0.7
107.0
0.33
0.32
$
$
82.7
105.8
105.8
0.78
0.78
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AOL INC.
NOTE 3BUSINESS ACQUISITIONS, DISPOSITIONS AND OTHER SIGNIFICANT TRANSACTIONS
Acquisition of StudioNow, Inc.
On January 22, 2010, the Company completed the acquisition of StudioNow, Inc. (StudioNow), a provider of a proprietary digital
platform that allows clients to create, produce, manage and distribute professional quality videos at scale, for a purchase price of $32.1 million
(excluding $3.1 million due two years after the closing date and contingent on the future service of certain StudioNow employees). $14.1 million
of the total consideration was paid through the issuance of 594,749 shares of AOL common stock valued as of the closing date. Of the remaining
$18.0 million, $14.0 million was paid in cash at the close date and $4.0 million reflects the present value of the cash consideration due two years
after the closing date. The $3.1 million payment contingent on the future service of certain StudioNow employees is not included in the purchase
price allocation and will be recognized as compensation expense on a straight-line basis over the two-year requisite service period.
This business was acquired to attract and engage more Internet users and drive high volumes of video content production through
StudioNows platform, which, along with market conditions at the time of acquisition, contributed to a purchase price that resulted in the
allocation of a significant portion of the purchase price to goodwill. AOL recognized $26.7 million of goodwill (which is not deductible for tax
purposes) and $4.3 million of intangible assets related to this acquisition. The results of operations of StudioNow from the acquisition date
through March 31, 2010 were not material to our consolidated financial statements.
Sale of buy.at
On February 26, 2010, the Company completed the sale of buy.at to Digital Window Limited for approximately $16.4 million in net cash.
The Company recorded a pre-tax loss on this sale of $17.7 million (on an after-tax basis, the loss was $6.1 million), calculated as the excess of
the carrying value of the net assets sold (including goodwill allocated to the sale of $12.6 million) over the cash proceeds, net of transaction
costs. The financial condition, results of operations and cash flows of buy.at have been reflected as discontinued operations for all periods
presented. The results of operations of buy.at were not material to the Companys consolidated financial statements.
The sale of buy.at generated a capital loss deferred tax asset in the United States of $65.9 million; however, sufficient uncertainty currently
exists regarding the future realization of the majority of this deferred tax asset. Accordingly, the Company has recorded a valuation allowance of
$61.1 million associated with this deferred tax asset. If in the future the Company believes that it is more likely than not that all or a portion of
this deferred tax asset will be realized, a reduction in the valuation allowance will be recognized in the statement of operations.
Sale of ICQ Operations
On April 28, 2010, we entered into an agreement for the sale of our ICQ operations for $187.5 million in cash (subject to working capital
adjustments). The sale is expected to close in the third quarter of 2010, subject to regulatory and other customary approvals in Russia and
Ukraine. ICQ provides online instant messaging services and products, as well as software related to such services and products, primarily to
international online consumers.
NOTE 4INCOME TAXES
The effective tax rate for income from continuing operations was 47.2% for the three months ended March 31, 2010, as compared to
40.6% for the three months ended March 31, 2009, due primarily to the change
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AOL INC.
in foreign deferred tax assets that are subject to a valuation allowance and the expiration of the U.S. federal research & experimentation tax
credit. The effective tax rate for the three months ended March 31, 2010 differs from the statutory U.S. federal income tax rate of 35.0% due
primarily to foreign deferred tax assets generated during the three months ended March 31, 2010 that are subject to a valuation allowance and
state income taxes, net of the federal income tax benefit.
For the three months ended March 31, 2010 and 2009, the Company recorded an income tax benefit on discontinued operations of $11.7
million and $0.3 million, respectively. The income tax benefit for the three months ended March 31, 2010 included a benefit of $11.6 million
related to the loss incurred on the sale of buy.at. See Note 3 for additional information on the sale of buy.at.
NOTE 5STOCKHOLDERS EQUITY
As of March 31, 2010, 106.5 million shares of common stock were issued and outstanding. No dividends were declared or paid for the
three months ended March 31, 2010.
On January 22, 2010, we issued 594,749 shares of AOL common stock as consideration for the acquisition of StudioNow, Inc. On
January 29, 2010, we issued 173,078 shares of AOL common stock to Polar Capital Group, LLC, in partial satisfaction of our contractual
obligation to return our CEOs initial investment of approximately $4.5 million in Patch Media Corporation (Patch), which arose from our
acquisition of Patch on June 10, 2009.
Under the terms of the Companys tax matters agreement with Time Warner, amounts payable or receivable to Time Warner prior to the
spin-off were reflected as adjustments to divisional equity. During the three months ended March 31, 2010, the Company adjusted its deferred
tax assets and its estimated amount payable to Time Warner for taxes prior to the spin-off and this adjustment resulted in a $25.9 million
reduction to additional paid-in capital.
NOTE 6EQUITY-BASED COMPENSATION
Pursuant to the Companys 2010 Stock Incentive Plan, or 2010 SIP, stock options are granted to employees and non-employee directors
of AOL with exercise prices equal to the quoted market value of the common stock at the date of grant. Generally, the stock options vest ratably
over a four year vesting period and expire ten years from the date of grant. Certain stock option awards provide for accelerated vesting upon an
election to retire after reaching a specified age and years of service, as well as certain additional circumstances for non-employee directors.
Also pursuant to the 2010 SIP, AOL may also grant shares of common stock or restricted stock units (RSUs) to its employees and nonemployee directors, which generally vest ratably over a four year period from the date of grant. Holders of restricted stock and RSU awards are
generally entitled to receive regular cash dividends or dividend equivalents, respectively, if paid by the Company during the period of time that
the restricted stock or RSU awards are unvested.
The Company is authorized to grant equity awards to employees covering an aggregate of 11.3 million shares of AOL common stock
under the 2010 SIP, of which up to 6.6 million awards may be issued in the form of full-value awards, such as restricted stock or RSUs.
Upon the (i) exercise of a stock option award, (ii) vesting of a RSU or (iii) grant of restricted stock, shares of AOL common stock are
issued from authorized but unissued shares or from treasury stock. At both March 31, 2010 and December 31, 2009, the Company did not have
any shares of treasury stock.
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AOL INC.
Equity-Based Compensation Expense
Compensation expense recognized by AOL related to its equity-based compensation plan and for its participation in Time Warners equitybased compensation plans, prior to the spin-off, is as follows (in millions):
2010
2009
Stock options
RSUs and performance stock units (PSUs) (a)
Total equity-based compensation expense
Tax benefit recognized
(a)
$
$
$
4.1
5.6
9.7
3.9
2.9
3.3
6.2
2.5
$
$
AOL has only granted RSUs to employees. Prior to the spin-off, Time Warner granted restricted stock units and PSUs to AOL employees.
As of March 31, 2010, total unrecognized compensation cost related to unvested AOL stock option awards, without taking into account
expected forfeitures, was $38.2 million and is expected to be recognized over a weighted-average period of approximately 3.0 years. Total
unrecognized compensation cost as of March 31, 2010 related to unvested RSUs, without taking into account expected forfeitures, was $74.8
million and is expected to be recognized over a weighted-average period of approximately 3.6 years.
Stock Options
The assumptions presented in the table below represent the weighted-average value of the applicable assumption used to value AOL stock
options at their grant date:
Three Months Ended
March 31, 2010
Expected volatility
Expected term to exercise from grant date
Risk-free rate
Expected dividend yield
41.6%
5.38 years
2.8%
0%
NOTE 7RESTRUCTURING COSTS

In connection with the Companys restructuring initiatives, the Company incurred $23.4 million and $58.3 million in restructuring costs for
the three months ended March 31, 2010 and 2009, respectively, to better align its organizational structure and costs with its strategy. These costs
related to voluntary and involuntary employee terminations and facility closures. Employee termination costs were attributable to terminations of
employees ranging from senior executives to line personnel. The Company expects to incur additional restructuring costs of up to $25.0 million
during the remainder of 2010 in connection with these initiatives.
A summary of AOLs restructuring activity for the three months ended March 31, 2010 is as follows (in millions):
Other Exit
Employee
Terminations
Liability at December 31, 2009

Net accruals
Foreign currency translation and other adjustments
Cash paid
Liability at March 31, 2010
$
28
108.1
18.6
(4.6)
(51.0)
71.1
Costs
28.3
4.8
(0.6)
(3.4)
29.1
Total
$136.4
23.4
(5.2)
(54.4)
$100.2
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AOL INC.
At March 31, 2010, of the remaining liability of $100.2 million, $86.3 million was classified as a current liability within accrued expenses
and other current liabilities, with the remaining $13.9 million classified as a long-term liability in the consolidated balance sheet. Amounts
classified as long-term are expected to be paid through 2014.
NOTE 8COMMITMENTS AND CONTINGENCIES
Commitments
For a description of AOLs commitments see Note 11 to the Companys audited consolidated financial statements included in the
Annual Report.
Contingencies
On May 24, 1999, two former AOL Community Leader volunteers brought a putative class action, Hallissey et al. v. America Online, Inc. ,
in the U.S. District Court for the Southern District of New York alleging violations of the Fair Labor Standards Act (FLSA) and New York
State law. The plaintiffs alleged that, in serving as AOL Community Leader volunteers, they were acting as employees rather than volunteers for
purposes of the FLSA and New York State law and are entitled to minimum wages. In 2001, four of the named plaintiffs in the Hallissey case
filed a related lawsuit alleging retaliation as a result of filing the FLSA suit in Williams, et al. v. America Online, Inc., et al. A related case was
filed by several of the Hallissey plaintiffs in the U.S. District Court for the Southern District of New York alleging violations of the retaliation
provisions of the FLSA. Also in 2001, two related class actions were filed in state courts in New Jersey (Superior Court of New Jersey, Bergen
County Law Division) and Ohio (Court of Common Pleas, Montgomery County, Ohio), alleging violations of the FLSA and/or the respective
state laws. These cases were removed to federal court and subsequently transferred to the U.S. District Court for the Southern District of New
York for consolidated pretrial proceedings with Hallissey .
On January 17, 2002, AOL Community Leader volunteers filed a class action lawsuit in the U.S. District Court for the Southern District of
New York, Hallissey et al. v. AOL Time Warner, Inc., et al. , against AOL LLC alleging ERISA violations and an entitlement to pension, welfare
and/or other employee benefits subject to ERISA. In March 2003, plaintiffs filed and served a second amended complaint, adding as defendants
the AOL Time Warner Administrative Committee and the AOL Administrative Committee.
The parties to all of the Community Leader-related lawsuits have agreed to settle the lawsuits on terms that did not result in a material
incremental expense or material payment by the Company in 2009. The court granted preliminary approval of the settlement on February 2,
2010. The Company does not expect to make any additional payments related to this matter.
On September 22, 2006, Salvadore Ramkissoon and two unnamed plaintiffs filed a putative class action against AOL LLC in the U.S.
District Court for the Northern District of California based on AOL LLCs public posting of AOL LLC member search queries in late July 2006.
Among other things, the complaint alleges violations of the Electronic Communications Privacy Act and California statutes relating to privacy,
data protection and false advertising. The complaint seeks class certification and damages, as well as injunctive relief that would oblige AOL
LLC to alter its search query retention practices. In February 2007, the District Court dismissed the action without prejudice. The plaintiffs then
appealed this decision to the Ninth Circuit. On January 16, 2009, the Ninth Circuit held that AOL LLCs Terms of Service violated California
public policy as to any California plaintiffs in the putative class, as it did not allow for them to fully exercise their rights. The Ninth Circuit
reversed and remanded to the District Court for further proceedings. On April 24, 2009, AOL LLC
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AOL INC.
filed a motion to implement the Ninth Circuits mandate. AOL LLC filed its answer on June 29, 2009. On July 6, 2009, the District Court found
that the plaintiffs claims for unjust enrichment and public disclosure of private facts were subject to the forum selection clause in the Terms of
Service and thus could not be pursued in that court. On October 27, 2009, plaintiffs filed a motion for class certification and two additional
named individuals filed a motion to intervene as plaintiffs in the matter. Also on October 27, AOL filed its reply brief with regards to its 12(c)
Motion for Judgment on the Pleadings. On February 2, 2010, the Court issued an Order granting AOLs motion to implement the mandate of the
Ninth Circuit. In its Order, the court dismissed named plaintiff Ramkissoon, as he is not a California resident. In addition, the court dismissed the
remaining claim under the Electronic Communications Privacy Act, as well as the claims for unjust enrichment and public disclosure of private
facts. The Court also dismissed without prejudice both the plaintiffs motion for class certification as well as AOLs 12(c) motion. Subsequent to
the courts order, AOL filed a modified 12(c) motion on February 24, 2010. Briefing on the 12(c) motion has been completed and a hearing is
currently scheduled for June 22, 2010. On March 2, 2010, plaintiffs counsel withdrew a motion seeking to have two additional class
representatives intervene in this action. On March 17, 2010, the plaintiffs filed a Writ of Mandamus with the Ninth Circuit challenging the
District Courts recent ruling. On April 13, 2010, the plaintiffs filed a motion seeking a stay of all proceedings until November 2010. AOLs
opposition to the stay motion is due May 18, 2010, the plaintiffs reply is due May 25, 2010 and the hearing is scheduled for June 8, 2010. The
Company intends to defend against this lawsuit vigorously.
In addition to the matters listed above, AOL is a party to a variety of legal proceedings that arise in the normal course of business. While
the results of such normal course legal proceedings cannot be predicted with certainty, management believes that, based on current knowledge,
the final outcome of the current pending matters will not have a material adverse effect on the Companys financial position, results of
operations or cash flows. Regardless of the outcome, legal proceedings can have an adverse effect on us because of defense costs, diversion of
management resources and other factors.
NOTE 9SEGMENT INFORMATION
An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and
incur expenses and that has discrete financial information that is regularly reviewed by the chief operating decision-maker in deciding how to
allocate resources and in assessing performance.
The Companys chief operating decision-maker, its chief executive officer, evaluates performance and makes operating decisions about
allocating resources based on financial data presented on a consolidated basis. There are no managers who are held accountable by AOLs chief
operating decision-maker, or anyone else, for an operating measure of profit or loss for any operating unit below the consolidated unit level.
Accordingly, management has determined that the Company has one segment.
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AOL INC.
ITEM 1.
LEGAL PROCEEDINGS
On May 24, 1999, two former AOL Community Leader volunteers brought a putative class action, Hallissey et al. v. America Online, Inc. ,
in the U.S. District Court for the Southern District of New York alleging violations of the Fair Labor Standards Act (FLSA) and New York
State law. The plaintiffs allege that, in serving as AOL Community Leader volunteers, they were acting as employees rather than volunteers for
purposes of the FLSA and New York State law and are entitled to minimum wages. In 2001, four of the named plaintiffs in the Hallissey case
filed a related lawsuit alleging retaliation as a result of filing the FLSA suit in Williams, et al. v. America Online, Inc., et al . A related case was
filed by several of the Hallissey plaintiffs in the U.S. District Court for the Southern District of New York alleging violations of the retaliation
provisions of the FLSA. Also in 2001, two related class actions were filed in state courts in New Jersey (Superior Court of New Jersey, Bergen
County Law Division) and Ohio (Court of Common Pleas, Montgomery County, Ohio), alleging violations of the FLSA and/or the respective
state laws. These cases were removed to federal court and subsequently transferred to the U.S. District Court for the Southern District of New
York for consolidated pretrial proceedings with Hallissey .
On January 17, 2002, AOL Community Leader volunteers filed a class action lawsuit in the U.S. District Court for the Southern District of
New York, Hallissey et al. v. AOL Time Warner, Inc., et al. , against AOL LLC alleging ERISA violations and an entitlement to pension, welfare
and/or other employee benefits subject to ERISA. In March 2003, plaintiffs filed and served a second amended complaint, adding as defendants
the AOL Time Warner Administrative Committee and the AOL Administrative Committee.
The parties to all of the Community Leader-related lawsuits have agreed to settle the lawsuits on terms that are not material to the
Company. The court granted preliminary approval of the settlement on February 2, 2010.
On September 22, 2006, Salvadore Ramkissoon and two unnamed plaintiffs filed a putative class action against AOL LLC in the U.S.
District Court for the Northern District of California based on AOL LLCs public posting of AOL LLC member search queries in late July 2006.
Among other things, the complaint alleges violations of the Electronic Communications Privacy Act and California statutes relating to privacy,
data protection and false advertising. The complaint seeks class certification and damages, as well as injunctive relief that would oblige AOL
LLC to alter its search query retention practices. In February 2007, the District Court dismissed the action without prejudice. The plaintiffs then
appealed this decision to the Ninth Circuit. On January 16, 2009, the Ninth Circuit held that AOL LLCs Terms of Service violated California
public policy as to any California plaintiffs in the putative class, as it did not allow for them to fully exercise their rights. The Ninth Circuit
reversed and remanded to the District Court for further proceedings. On April 24, 2009, AOL LLC filed a motion to implement the Ninth
Circuits mandate. AOL LLC filed its answer on June 29, 2009. On July 6, 2009, the District Court found that the plaintiffs claims for unjust
enrichment and public disclosure of private facts were subject to the forum selection clause in the Terms of Service and thus could not be
pursued in that court. On October 27, 2009, plaintiffs filed a motion for class certification and two additional named individuals filed a motion to
intervene as plaintiffs in the matter. Also on October 27, AOL filed its reply brief with regards to its 12(c) Motion for Judgment on the
Pleadings. On February 2, 2010, the Court issued an Order granting AOLs motion to implement the mandate of the Ninth Circuit. In its Order,
the court dismissed named plaintiff Ramkissoon, as he is not a California resident. In addition, the court dismissed the remaining claim under the
Electronic Communications Privacy Act, as well as the claims for unjust enrichment and public disclosure of private facts. The Court also
dismissed without prejudice both the plaintiffs motion for class certification as well as AOLs 12(c) motion. Subsequent to the courts order,
AOL filed a modified 12(c) motion on February 24, 2010. Briefing on the 12(c) motion has been completed and a hearing is currently scheduled
for June 22, 2010. On March 2, 2010, plaintiffs counsel withdrew a motion seeking to have two additional class representatives intervene in this
action. On March 17, 2010, the plaintiffs filed a Writ of Mandamus with the Ninth Circuit
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AOL INC.
challenging the District Courts recent ruling. On April 13, 2010, the plaintiffs filed a motion seeking a stay of all proceedings until November
2010. AOLs opposition to the stay motion is due May 18, 2010, the plaintiffs reply is due May 25, 2010 and the hearing is scheduled for
June 8, 2010. The Company intends to defend against this lawsuit vigorously.
In addition to the matters listed above, we are a party to a variety of legal proceedings that arise in the normal course of our business.
While the results of such normal course legal proceedings cannot be predicted with certainty, management believes that, based on current
knowledge, the final outcome of the current pending matters will not have a material adverse effect on our financial position, results of
operations or cash flows. Regardless of the outcome, legal proceedings can have an adverse effect on us because of defense costs, diversion of
management resources and other factors. See Item 1ARisk FactorsRisks Relating to Our BusinessIf we cannot continue to enforce and
protect our intellectual property rights, our business could be adversely affected and Item 1ARisk FactorsRisks Relating to Our
BusinessWe have been, and may in the future be, subject to claims of intellectual property infringement that could adversely affect our
business included in our Annual Report.
ITEM 1A.
RISK FACTORS
There have been no material changes in the Companys risk factors from those disclosed in Part I, Item 1A of our Annual Report.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities

On January 22, 2010, we issued 594,749 shares of AOL common stock as consideration for the acquisition of StudioNow, Inc. The shares
were issued pursuant to an exemption from the registration requirements of the Securities Act as provided by Section 4(2).
On January 29, 2010, we issued 173,078 shares of AOL common stock to Polar Capital Group, LLC, in partial satisfaction of our
contractual obligation to return our Chief Executive Officers initial investment of approximately $4.5 million in Patch, which arose from our
acquisition of Patch on June 10, 2009. The shares were issued pursuant to an exemption from the registration requirements of the Securities Act
as provided by Section 4(2).
ITEM 6.
EXHIBITS
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure,
other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In
particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context
of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
See the Exhibit Index immediately following the signature page of this Quarterly Report.
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AOL INC.
SIGNATURES
Pursuant to the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on April 28, 2010.
AOL INC.
By
/ S / A RTHUR M INSON
Name: Arthur Minson
Title: Executive Vice President and Chief Financial
Officer
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AOL INC.
EXHIBIT INDEX
Exhibit
Number
Description
10.1
First Amendment to Master Services Agreement for ATDN and Hosting Services between AOL Inc. and Time Warner Inc.,
dated January 8, 2010 and effective January 1, 2010.
10.2
Third Amendment to Search Services Agreement between AOL Inc. and Time Inc. (Time SSA), dated January 29, 2010 and
effective January 31, 2010.
10.3
Fourth Amendment to Time SSA, dated February 26, 2010 and effective February 28, 2010.
10.4
Fifth Amendment to Time SSA, dated March 30, 2010 and effective March 31, 2010.
10.5
Third Amendment to Search Services Agreement between AOL Inc. and CNN Interactive Group, Inc. (CNN SSA), dated
January 27, 2010 and effective January 31, 2010.
10.6
Fourth Amendment to the CNN SSA, dated February 26, 2010 and effective February 28, 2010.
10.7
Fifth Amendment to the CNN SSA, dated March 31, 2010.
10.8
Twenty-Fourth Amendment to the Amended and Restated Interactive Marketing Agreement between AOL Inc. and Google Inc.
(IMA), dated January 29, 2010 and effective February 1, 2010.*
10.9
Twenty-Fifth Amendment to IMA, dated February 26, 2010 and effective March 1, 2010.*
10.10
Twenty-Sixth Amendment to IMA, dated March 31, 2010 and effective April 1, 2010.*
10.11
Letter Agreement between AOL Inc., Polar Capital Group, LLC and Polar News Company, LLC, dated January 29, 2010.
31.1
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the
Registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.
31.2
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the
Registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.
32.1
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, with respect to the Registrants Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.
This certification will not be deemed filed for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the
liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or
Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.
* An application for confidential treatment for selected portions of this agreement has been filed with the Securities and Exchange Commission.
34
Exhibit 10.1
FIRST AMENDMENT TO
MASTER SERVICES AGREEMENT
This First Amendment to the Master Services Agreement (First Amendment), effective as of January 1, 2010 (the First Amendment
Effective Date) modifies that certain Master Services Agreement made by and between AOL Inc. (AOL) and Time Warner Inc. (Time
Warner) (each a Party; collectively referred to herein as the Parties) on November 16, 2009 (the Agreement).
WHEREAS , the Parties entered into the Agreement, effective December 1, 2009; and
WHEREAS , the Parties wish to amend the Agreement to terminate certain content delivery services being provided to Time Warner by
AOL and to make certain other modifications in the Agreement, as set forth below; and
NOW, THEREFORE , in consideration of the foregoing recitals, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the Parties agree as follows:
1. Terms of Art . Capitalized terms used herein shall have the meanings set forth in the Agreement.
2. Deletion of Exhibit E . EXHIBIT E of the Agreement is hereby amended by deleting the exhibit in its entirety. Notwithstanding the
forgoing, the Parties agree that AOL may thereafter invoice the applicable TW Company and the applicable TW Company shall pay for (i) any
Services provided to such TW Company under Exhibit E prior to the First Amendment Effective Date; and (ii) any fees for Services provided to
the applicable TW Company pursuant Exhibit E that are accurately billed by AOLs third party provider, Akamai Technologies, to AOL on
behalf of such TW Company.
3. Effect of Amendment . Except as expressly amended by this First Amendment, all of the original terms and provisions of the Agreement
shall continue in full force and effect. In the event of a conflict between the terms of this First Amendment and the Agreement, the terms of this
First Amendment will prevail.
4. Execution in Counterparts . This First Amendment may be executed by the Parties in one or more counterparts, and each of which when so
executed shall be an original, but all such counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF , the Parties have caused this First Amendment to be effective as of the First Amendment Effective Date.
TIME WARNER INC.
AOL INC.
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
/s/ Ken Gottesman

Ken Gottesman
VP, Procurement Services
1/8/10
1
/s/ Theodore R. Cahall, Jr.

Theodore R. Cahall, Jr.
EVP & CTO
1/8/10
Exhibit 10.2
Execution Copy
THIRD AMENDMENT TO SEARCH SERVICES AGREEMENT
This Third Amendment to Search Services Agreement ( Third Amendment ) is entered into by and between AOL Inc. (successorin-interest to AOL LLC), a Delaware corporation, with its principal place of business at 770 Broadway, New York, NY 10003 ( AOL ), and
Time Inc. ( TI ), a Delaware corporation with offices at 1271 Avenue of the Americas, New York, New York 10020, effective as of
January 31, 2010 (the Third Amendment Effective Date ).
INTRODUCTION
The Parties hereto wish to amend the Search Services Agreement entered into by and between the AOL and TI on August 23, 2007,
as amended by the First Amendment dated as of March 10, 2009 and Second Amendment dated as of December 17, 2009 (collectively, the
Existing Agreement ). Together, the Existing Agreement and this Third Amendment shall be referred to collectively as the Agreement .
Capitalized terms not defined in this Third Amendment shall have the meanings set forth in the Existing Agreement.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby amend the
Existing Agreement as follows:
1.
Term . Section 6.1 (titled, Term) of the Existing Agreement is hereby deleted in its entirety and replaced with the following:
This Agreement will commence on the Effective Date and shall expire at 11:59 p.m. (EST) on February 28, 2010, unless terminated
earlier as provided for in this Agreement (the Term ). TI may terminate this Agreement upon no less than three (3) days prior
written notice to AOL if Google is prepared to provide search services directly to TI.
2.
Order of Precedence; Entire Agreement . Except as expressly modified by this Third Amendment, all terms and conditions, and
provisions of the Existing Agreement shall continue in full force and effect. In the event of conflict between the terms and conditions of the
Existing Agreement and the terms and conditions of this Third Amendment, the terms and conditions of this Third Amendment will
control. The Existing Agreement, together with any exhibits, and schedules attached thereto and referenced therein, all as modified by this
Third Amendment, constitutes the entire and exclusive agreement between the Parties with respect to the subject matter thereof.
3.
Counterparts; Facsimile . This Third Amendment may be executed in counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same document. This Third Amendment may be executed by signatures transmitted by
facsimile.
IN WITNESS WHEREOF, the Parties have caused this Third Amendment to Search Services Agreement to be signed by their duly
authorized representatives and delivered as of the dates set forth below.
AOL INC.
TIME INC.
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
/s/ Steven Quan

Steven Quan
VP, Business Development
1/29/10
Confidential
/s/ Andy Blau

Andy Blau
GM & SVP News Business Unit
01/29/2010
Exhibit 10.3
Execution Copy
FOURTH AMENDMENT TO SEARCH SERVICES AGREEMENT
This Fourth Amendment to Search Services Agreement ( Fourth Amendment ) is entered into by and between AOL Inc.
(successor-in-interest to AOL LLC), a Delaware corporation, with its principal place of business at 770 Broadway, New York, NY 10003 (
AOL ), and Time Inc. ( TI ), a Delaware corporation with offices at 1271 Avenue of the Americas, New York, New York 10020, effective as
of February 28, 2010 (the Fourth Amendment Effective Date ).
INTRODUCTION
as amended by the First Amendment dated as of March 10, 2009, Second Amendment dated as of December 17, 2009, and Third Amendment
dated as of January 31, 2010 (collectively, the Existing Agreement ). Together, the Existing Agreement and this Fourth Amendment shall be
referred to collectively as the Agreement . Capitalized terms not defined in this Fourth Amendment shall have the meanings set forth in the
Existing Agreement.
AGREEMENT
1.
This Agreement will commence on the Effective Date and shall expire at 11:59 p.m. (EST) on March 31, 2010, unless terminated
earlier as provided for in this Agreement (the Term ). TI may terminate this Agreement upon no less than three (3) days prior
written notice to AOL if Google is prepared to provide search services directly to TI.
2.
Order of Precedence; Entire Agreement . Except as expressly modified by this Fourth Amendment, all terms and conditions, and
Existing Agreement and the terms and conditions of this Fourth Amendment, the terms and conditions of this Fourth Amendment will
Fourth Amendment, constitutes the entire and exclusive agreement between the Parties with respect to the subject matter thereof.
3.
Counterparts; Facsimile . This Fourth Amendment may be executed in counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same document. This Fourth Amendment may be executed by signatures transmitted by
facsimile.
IN WITNESS WHEREOF, the Parties have caused this Fourth Amendment to Search Services Agreement to be signed by their duly
AOL INC.
TIME INC.
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
/s/ Steven Quan

Steven Quan
2/25/10
Confidential
/s/ Cyrus Beagley

Cyrus Beagley
GM & SVP AD SALES & MARKETING
2/26/10
Exhibit 10.4
Execution Copy
FIFTH AMENDMENT TO SEARCH SERVICES AGREEMENT
This Fifth Amendment to Search Services Agreement ( Fifth Amendment ) is entered into by and between AOL Inc. (successor-ininterest to AOL LLC), a Delaware corporation, with its principal place of business at 770 Broadway, New York, NY 10003 ( AOL ), and Time
Inc. ( TI ), a Delaware corporation with offices at 1271 Avenue of the Americas, New York, New York 10020, effective as of March 31, 2010
(the Fifth Amendment Effective Date ).
INTRODUCTION
as amended by the First Amendment dated as of March 10, 2009, Second Amendment dated as of December 17, 2009, the Third Amendment
dated as of January 31, 2010, and the Fourth Amendment dated as of February 28, 2010 (collectively, the Existing Agreement ). Together, the
Existing Agreement and this Fifth Amendment shall be referred to collectively as the Agreement . Capitalized terms not defined in this Fifth
Amendment shall have the meanings set forth in the Existing Agreement.
AGREEMENT
1.
This Agreement will commence on the Effective Date and shall expire at 11:59 p.m. (EST) on April 30, 2010, unless terminated
earlier as provided for in this Agreement (the Term ). TI may terminate this Agreement by providing written notice to AOL at
least three (3) business days in advance of the desired effective early termination date, which written notice may be in the form of
email to the following AOL employees: (i) Steve Quan, VP Business Development at Steven.Quan@corp.aol.com, and (ii) Francis
Lobo, VP AOL Search at Francis.Lobo@corp.aol.com.
2.
Order of Precedence; Entire Agreement . Except as expressly modified by this Fifth Amendment, all terms and conditions, and
Existing Agreement and the terms and conditions of this Fifth Amendment, the terms and conditions of this Fifth Amendment will control.
The Existing Agreement, together with any exhibits, and schedules attached thereto and referenced therein, all as modified by this Fifth
Amendment, constitutes the entire and exclusive agreement between the Parties with respect to the subject matter thereof.
3.
Counterparts; Facsimile . This Fifth Amendment may be executed in counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same document. This Fifth Amendment may be executed by signatures transmitted by
facsimile.
IN WITNESS WHEREOF, the Parties have caused this Fifth Amendment to Search Services Agreement to be signed by their duly
AOL INC.
TIME INC.
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
/s/ Steven Quan

Steven Quan
3/30/10
Confidential
/s/ Kavata Mbondo

Kavata Mbondo
Dir., Inventory Analytics & Bus. Dev.
3/30/2010
Exhibit 10.5
Execution Copy
THIRD AMENDMENT TO SEARCH SERVICES AGREEMENT
This Third Amendment to Search Services Agreement ( Third Amendment ) is entered into by and between AOL Inc. (successorin-interest to AOL LLC), a Delaware corporation, with its principal place of business at 770 Broadway, New York, NY 10003 ( AOL ), and
CNN Interactive Group, Inc. ( CNN ), a Delaware corporation with offices at One CNN Center, Atlanta, GA 30303, effective as of January 31,
2010 (the Third Amendment Effective Date ).
INTRODUCTION
The Parties hereto wish to amend the Search Services Agreement entered into by and between AOL and CNN on or about
September 1, 2007, as amended by the First Amendment dated as of April 30, 2008, and the Second Amendment dated as of December 10, 2009
(collectively, the Existing Agreement ). Together, the Existing Agreement and this Third Amendment shall be referred to collectively as the
Agreement . Capitalized terms not defined in this Third Amendment shall have the meanings set forth in the Existing Agreement.
AGREEMENT
1.
This Agreement will commence on the Effective Date and shall expire at 11:59 p.m. (EST) on February 28, 2010, unless terminated
earlier as provided for in this Agreement (the Term ).
2.
Order of Precedence; Entire Agreement . Except as expressly modified by this Third Amendment, all terms and conditions, and
Existing Agreement and the terms and conditions of this Third Amendment, the terms and conditions of this Third Amendment will
Third Amendment, constitutes the entire and exclusive agreement between the Parties with respect to the subject matter thereof.
3.
Counterparts; Facsimile . This Third Amendment may be executed in counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same document. This Third Amendment may be executed by signatures transmitted by
facsimile or email.
IN WITNESS WHEREOF, the Parties have caused this Third Amendment to Search Services Agreement to be signed by their duly
AOL INC.
CNN INTERACTIVE GROUP, INC.
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
/s/ Steven Quan

Steven Quan
1/27/10
Confidential
/s/ Susan Grant

Susan Grant
EVP
1/27/10
Exhibit 10.6
Execution Copy
FOURTH AMENDMENT TO SEARCH SERVICES AGREEMENT
This Fourth Amendment to Search Services Agreement ( Fourth Amendment ) is entered into by and between AOL Inc.
(successor-in-interest to AOL LLC), a Delaware corporation, with its principal place of business at 770 Broadway, New York, NY 10003 (
AOL ), and CNN Interactive Group, Inc. ( CNN ), a Delaware corporation with offices at One CNN Center, Atlanta, GA 30303, effective as
of February 28, 2010 (the Fourth Amendment Effective Date ).
INTRODUCTION
September 1, 2007, as amended by the First Amendment dated as of April 30, 2008, the Second Amendment dated as of December 10, 2009, and
the Third Amendment dated as of January 31, 2010 (collectively, the Existing Agreement ). Together, the Existing Agreement and this Fourth
Amendment shall be referred to collectively as the Agreement . Capitalized terms not defined in this Fourth Amendment shall have the
meanings set forth in the Existing Agreement.
AGREEMENT
1.
This Agreement will commence on the Effective Date and shall expire at 11:59 p.m. (EST) on March 31, 2010, unless terminated
earlier as provided for in this Agreement (the Term ).
2.
Order of Precedence; Entire Agreement . Except as expressly modified by this Fourth Amendment, all terms and conditions, and
Existing Agreement and the terms and conditions of this Fourth Amendment, the terms and conditions of this Fourth Amendment will
Fourth Amendment, constitutes the entire and exclusive agreement between the Parties with respect to the subject matter thereof.
3.
Counterparts; Facsimile . This Fourth Amendment may be executed in counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same document. This Fourth Amendment may be executed by signatures transmitted by
facsimile or email.
IN WITNESS WHEREOF, the Parties have caused this Fourth Amendment to Search Services Agreement to be signed by their duly
AOL INC.
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
/s/ Steven Quan

Steven Quan
2/25/10
Confidential
/s/ Susan Grant

Susan Grant
EVP, CNN News Services
2/26/10
Exhibit 10.7
Execution Copy
FIFTH AMENDMENT TO SEARCH SERVICES AGREEMENT
This Fifth Amendment to Search Services Agreement ( Fifth Amendment ) is entered into by and between AOL Inc. (successor-ininterest to AOL LLC), a Delaware corporation, with its principal place of business at 770 Broadway, New York, NY 10003 ( AOL ), and CNN
Interactive Group, Inc. ( CNN ), a Delaware corporation with offices at One CNN Center, Atlanta, GA 30303, effective as of March 31, 2010
(the Fifth Amendment Effective Date ).
INTRODUCTION
September 1, 2007, as amended by the First Amendment dated as of April 30, 2008, the Second Amendment dated as of December 10, 2009, the
Third Amendment dated as of January 31, 2010, and the Fourth Amendment dated as of February 28, 2010 (collectively, the Existing
Agreement ). Together, the Existing Agreement and this Fifth Amendment shall be referred to collectively as the Agreement . Capitalized
terms not defined in this Fifth Amendment shall have the meanings set forth in the Existing Agreement.
AGREEMENT
1.
This Agreement will commence on the Effective Date and shall expire at 11:59 p.m. (EST) on April 30, 2010, unless terminated
earlier as provided for in this Agreement (the Term ). CNN may terminate this Agreement by providing written notice to AOL at
least three (3) business days in advance of the desired effective early termination date, which written notice may be in the form of
email to the following AOL employees: (i) Steve Quan, VP Business Development at Steven.Quan@corp.aol.com, and (ii) Francis
Lobo, VP AOL Search at Francis.Lobo@corp.aol.com.
2.
Order of Precedence; Entire Agreement . Except as expressly modified by this Fifth Amendment, all terms and conditions, and
Existing Agreement and the terms and conditions of this Fifth Amendment, the terms and conditions of this Fifth Amendment will control.
The Existing Agreement, together with any exhibits, and schedules attached thereto and referenced therein, all as modified by this Fifth
Amendment, constitutes the entire and exclusive agreement between the Parties with respect to the subject matter thereof.
3.
Counterparts; Facsimile . This Fifth Amendment may be executed in counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same document. This Fifth Amendment may be executed by signatures transmitted by facsimile
or email.
IN WITNESS WHEREOF, the Parties have caused this Fifth Amendment to Search Services Agreement to be signed by their duly
AOL INC.
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
/s/ Steven Quan

Steven Quan
3/30/10
Confidential
/s/ Susan Grant

Susan Grant
EVP
3/31/10
Exhibit 10.8
THE USE OF THE FOLLOWING NOTATION IN THIS EXHIBIT INDICATES THAT A CONFIDENTIAL PORTION HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION: [****].
TWENTY-FOURTH AMENDMENT TO AMENDED AND RESTATED
INTERACTIVE MARKETING AGREEMENT
This Twenty-Fourth Amendment to Amended and Restated Interactive Marketing Agreement ( Twenty-Fourth Amendment ) is
entered into by and between AOL INC., a Delaware corporation (successor in interest to AOL LLC), with its principal place of business at 770
Broadway, New York, NY 10003 ( AOL ), and GOOGLE INC., a Delaware corporation (successor-in-interest to Google Inc., a California
corporation) with offices at 1600 Amphitheatre Parkway, Mountain View, CA 94043 ( Google ), effective as of February 1, 2010 (the
Twenty-Fourth Amendment Effective Date ). AOL and Google may be referred to individually as a Party and collectively as the
Parties .
INTRODUCTION
The Parties hereto wish to further amend that certain Amended and Restated Interactive Marketing Agreement effective as of October 1,
2003 (the IMA ), as amended previously by that certain First Amendment to the Amended and Restated Interactive Marketing Agreement
effective as of December 15, 2003 (the First Amendment ), that Second Amendment to Amended and Restated Interactive Marketing
Agreement effective as of March 30, 2004 (the Second Amendment ), that Third Amendment to Amended and Restated Interactive
Marketing Agreement effective as of April 7, 2004 (the Third Amendment ), that Fourth Amendment to Amended and Restated Interactive
Marketing Agreement effective as of June 1, 2004 (the Fourth Amendment ), that Fifth Amendment to Amended and Restated Interactive
Marketing Agreement effective as of June 14, 2004 (the Fifth Amendment ), that Sixth Amendment to Amended and Restated Interactive
Marketing Agreement effective as of December 17, 2004 (the Sixth Amendment ), that Seventh Amendment to Amended and Restated
Interactive Marketing Agreement effective as of March 28, 2005 (the Seventh Amendment ), that Eighth Amendment to Amended and
Restated Interactive Marketing Agreement effective as of April 28, 2005 (the Eighth Amendment ), that Ninth Amendment to Amended and
Restated Interactive Marketing Agreement effective as of December 15, 2005 (the Ninth Amendment ), that Tenth Amendment to Amended
and Restated Interactive Marketing Agreement effective as of March 24, 2006 (the Tenth Amendment ), that Eleventh Amendment to
Amended and Restated Interactive Marketing Agreement effective as of September 28, 2006 (the Eleventh Amendment ), that Twelfth
Amendment to Amended and Restated Interactive Marketing Agreement effective as of December 15, 2006 (the Twelfth Amendment ), that
Thirteenth Amendment to Amended and Restated Interactive Marketing Agreement effective as of January 12, 2007 (the Thirteenth
Amendment ), that Fourteenth Amendment to Amended and Restated Interactive Marketing Agreement effective as of February 16, 2007 (the
Fourteenth Amendment ), that Fifteenth Amendment to Amended and Restated Interactive Marketing Agreement effective as of March 2,
2007 (the Fifteenth Amendment ), that Sixteenth Amendment to Amended and Restated Interactive Marketing Agreement effective as of
September 24, 2007 (the Sixteenth Amendment ), that Seventeenth Amendment to Amended and Restated Interactive Marketing Agreement
effective as of February 29, 2008 (the Seventeenth Amendment ), that Eighteenth Amendment to Amended and Restated Interactive
Marketing Agreement effective as of March 31, 2008 (the Eighteenth Amendment ), that Nineteenth Amendment to Amended and Restated
Interactive Marketing Agreement effective as of April 30, 2008 (the Nineteenth Amendment ), that Twentieth Amendment to Amended and
Restated Interactive Marketing Agreement effective as of October 1, 2008 (the Twentieth Amendment ), that Twenty-First Amendment to
Amended and Restated Interactive Marketing Agreement effective as of November 1, 2008 (the Twenty-First Amendment ), that
1
GOOGLE & AOL CONFIDENTIAL
EXECUTION COPY
Twenty-Second Amendment to Amended and Restated Interactive Marketing Agreement effective as of March 13, 2009 (the Twenty-Second
Amendment ), Twenty-Third Amendment to Amended and Restated Interactive Marketing Agreement effective as of December 4, 2009 (the
Twenty-Third Amendment ), and that Addendum One to the Second Amendment to Amended and Restated Interactive Marketing Agreement
dated October 5, 2004 ( Addendum One ) (the IMA and such amendments and addendum, collectively the Existing Agreement and the
Existing Agreement together with this Twenty-Fourth Amendment, the Agreement ). Capitalized terms not defined in this Twenty-Fourth
Amendment shall have the meanings set forth in the Existing Agreement.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby amend the Existing
Agreement as follows:
1. Twenty-Third Amendment .
1.1 Spin-Off Date . For the avoidance of doubt, the Parties thereto agree that the actual Spin-Off Date set forth in the Twenty-Third
Amendment was December 10, 2009.
1.2 Interim Period . The Parties hereto agree to amend the Twenty-Third Amendment by deleting the definition of Interim Period set forth
in Section A (Definitions) of the Twenty-Third Amendment in its entirety and replacing it with the following:
Interim Period means the period of time beginning on the Spin-Off Date and ending on [****].
The terms of the Twenty-Third Amendment (as amended by this Twenty-Fourth Amendment) shall remain in full force and effect.
2. Survival . For the sake of clarity, the terms of the Twenty-Fourth Amendment and the Twenty-Third Amendment (as amended by this
Twenty-Fourth Amendment) shall survive the completion, expiration, termination or cancellation of the Agreement.
3. Order of Precedence . This Twenty-Fourth Amendment is supplementary to and modifies the Existing Agreement. The terms of this TwentyFourth Amendment supersede provisions in the Existing Agreement only to the extent that the terms of this Twenty-Fourth Amendment and the
Existing Agreement expressly conflict. However, nothing in this Twenty-Fourth Amendment shall be interpreted as invalidating the Existing
Agreement, and provisions of the Existing Agreement shall continue to govern relations between the Parties insofar as they do not expressly
conflict with this Twenty-Fourth Amendment. Furthermore, for the avoidance of doubt, any amendments or other changes made to any terms of
the Existing Agreement under this Twenty-Fourth Amendment shall be interpreted to have full force and effect on any other relevant provisions
of the Existing Agreement (including, but not limited to, Definitions, Exhibits, and Schedules related thereto), which reference or rely on such
amended or changed terms.
4. Entire Agreement . This Agreement constitutes the entire agreement with respect to the subject matter hereof. The Agreement supersedes any
other prior or collateral agreements, whether oral or written, with respect to the subject matter hereof.
5. Counterparts; Facsimile . This Twenty-Fourth Amendment may be executed in counterparts, each of which shall be deemed an original and
all of which together shall constitute one and the same document. This Twenty-Fourth Amendment may be executed by facsimile.
2
EXECUTION COPY
[Remainder of this page intentionally left blank; Signature page follows.]

3
EXECUTION COPY
IN WITNESS WHEREOF, the Parties have executed this Twenty-Fourth Amendment to the Existing Agreement.
AOL INC.
GOOGLE INC.
By:
/s/ Steven Quan
Name: Steven Quan
Title: VP Business Development
/s/ Sanjay Kapoor

By:
Name: Sanjay Kapoor
Title: Vice President, Search Partnerships
Google Inc.
Date: 2010.01.2
9 10:41:53
-0800
Date:
1/29/10
EXECUTION COPY
Exhibit 10.9
TWENTY-FIFTH AMENDMENT TO AMENDED AND RESTATED
This Twenty-Fifth Amendment to Amended and Restated Interactive Marketing Agreement ( Twenty-Fifth Amendment ) is entered
into by and between AOL INC., a Delaware corporation (successor in interest to AOL LLC), with its principal place of business at 770
corporation) with offices at 1600 Amphitheatre Parkway, Mountain View, CA 94043 ( Google ), effective as of March 1, 2010 (the TwentyFifth Amendment Effective Date ). AOL and Google may be referred to individually as a Party and collectively as the Parties .
INTRODUCTION
Amended and Restated Interactive Marketing Agreement effective as of November 1, 2008 (the Twenty-First Amendment ), that
1
GOOGLE CONFIDENTIAL
25 th Amendment EXECUTION COPY
Twenty-Second Amendment to Amended and Restated Interactive Marketing Agreement effective as of March 13, 2009 (the Twenty-Second
Twenty-Third Amendment ), Twenty-Fourth Amendment to Amended and Restated Interactive Marketing Agreement effective as of
February 1, 2010 (the Twenty-Fourth Amendment ), and that Addendum One to the Second Amendment to Amended and Restated
Interactive Marketing Agreement dated October 5, 2004 ( Addendum One ) (the IMA and such amendments and addendum, collectively the
Existing Agreement and the Existing Agreement together with this Twenty-Fifth Amendment, the Agreement ). Capitalized terms not
defined in this Twenty-Fifth Amendment shall have the meanings set forth in the Existing Agreement.
AGREEMENT
1. Twenty-Fourth Amendment .
1.1 Interim Period . The Parties hereto agree to amend the Twenty-Fourth Amendment by deleting the definition of Interim Period set
forth in the Twenty-Fourth Amendment in its entirety and replacing it with the following:
The terms of the Twenty-Fourth Amendment (as amended by this Twenty-Fifth Amendment) shall remain in full force and effect.
2. Order of Precedence . This Twenty-Fifth Amendment is supplementary to and modifies the Existing Agreement. The terms of this TwentyFifth Amendment supersede provisions in the Existing Agreement only to the extent that the terms of this Twenty-Fifth Amendment and the
Existing Agreement expressly conflict. However, nothing in this Twenty-Fifth Amendment shall be interpreted as invalidating the Existing
conflict with this Twenty-Fifth Amendment. Furthermore, for the avoidance of doubt, any amendments or other changes made to any terms of
the Existing Agreement under this Twenty-Fifth Amendment shall be interpreted to have full force and effect on any other relevant provisions of
the Existing Agreement (including, but not limited to, Definitions, Exhibits, and Schedules related thereto), which reference or rely on such
4. Counterparts; Facsimile . This Twenty-Fifth Amendment may be executed in counterparts, each of which shall be deemed an original and
all of which together shall constitute one and the same document. This Twenty-Fifth Amendment may be executed by facsimile.
2
GOOGLE CONFIDENTIAL
IN WITNESS WHEREOF, the Parties have executed this Twenty-Fifth Amendment to the Existing Agreement.
AOL INC.
GOOGLE INC.
By:
/s/ Steven Quan
Name: Steven Quan
Title: VP, Business Development
/s/ Nikesh Arora

By:
Name: Nikesh Arora
Title: President, Global Sales and Business Development
Google Inc.
Date: 2010.02.26
16:24:19
-0800
Date:
2/26/10
3
GOOGLE CONFIDENTIAL
Exhibit 10.10
TWENTY-SIXTH AMENDMENT TO AMENDED AND RESTATED
This Twenty-Sixth Amendment to Amended and Restated Interactive Marketing Agreement ( Twenty-Sixth Amendment ) is entered
into by and between AOL INC., a Delaware corporation (successor in interest to AOL LLC), with its principal place of business at 770
corporation) with offices at 1600 Amphitheatre Parkway, Mountain View, CA 94043 ( Google ), effective as of April 1, 2010 (the TwentySixth Amendment Effective Date ). AOL and Google may be referred to individually as a Party and collectively as the Parties .
INTRODUCTION
1
GOOGLE CONFIDENTIAL
Amended and Restated Interactive Marketing Agreement effective as of November 1, 2008 (the Twenty-First Amendment ), that TwentySecond Amendment to Amended and Restated Interactive Marketing Agreement effective as of March 13, 2009 (the Twenty-Second
Twenty-Third Amendment ), Twenty-Fourth Amendment to Amended and Restated Interactive Marketing Agreement effective as of
February 1, 2010 (the Twenty-Fourth Amendment ), Twenty-Fifth Amendment to Amended and Restated Interactive Marketing Agreement
effective as of March 1, 2010 (the Twenty-Fifth Amendment ), and that Addendum One to the Second Amendment to Amended and
Restated Interactive Marketing Agreement dated October 5, 2004 ( Addendum One ) (the IMA and such amendments and addendum,
collectively the Existing Agreement and the Existing Agreement together with this Twenty-Sixth Amendment, the Agreement ).
Capitalized terms not defined in this Twenty- Sixth Amendment shall have the meanings set forth in the Existing Agreement.
AGREEMENT
1. Interim Period . The Parties hereto agree to amend the Twenty-Fifth Amendment by deleting the definition of Interim Period set forth in the
Twenty-Fifth Amendment in its entirety and replacing it with the following:
2. Payment to Interim Properties . Notwithstanding anything to the contrary in the Existing Agreement, with respect to Ad Revenues
generated from CNN Interim Properties and TII Interim Properties commencing from [****] Google shall pay to AOL as follows:
[****] of Net Ad Revenues if calendar monthly Ad Revenues attributable to CNN Interim Properties and TII Interim Properties, in the
aggregate, are less than or equal to [****]; or
[****] of Net Ad Revenues if calendar monthly Ad Revenues attributable to CNN Interim Properties and TII Interim Properties, in the
aggregate, are greater than [****].
Payment will be made in the month following the calendar month in which the applicable Sponsored Links were displayed. Interim Properties,
CNN Interim Properties and TII Interim Properties are defined in the Twenty-Third Amendment.
For purposes of this Section 2, the capitalized terms below shall have the following meaning:
Ad Deduction means, for any given period, [****] of Ad Revenues for that period.
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GOOGLE CONFIDENTIAL
Ad Revenues means revenues that are recognized by Google in a given period and attributed to Sponsored Links in that period.
Net Ad Revenues means, for any given period, Ad Revenues for that period minus the Ad Deduction for that period.
[****]
3. Order of Precedence . This Twenty-Sixth Amendment is supplementary to and modifies the Existing Agreement. The terms of this TwentySixth Amendment supersede provisions in the Existing Agreement only to the extent that the terms of this Twenty-Sixth Amendment and the
Existing Agreement expressly conflict. However, nothing in this Twenty-Sixth Amendment shall be interpreted as invalidating the Existing
conflict with this Twenty-Sixth Amendment. Furthermore, for the avoidance of doubt, any amendments or other changes made to any terms of
the Existing Agreement under this Twenty-Sixth Amendment shall be interpreted to have full force and effect on any other relevant provisions of
the Existing Agreement (including, but not limited to, Definitions, Exhibits, and Schedules related thereto), which reference or rely on such
5. Counterparts; Facsimile . This Twenty-Sixth Amendment may be executed in counterparts, each of which shall be deemed an original and
all of which together shall constitute one and the same document. This Twenty-Sixth Amendment may be executed by facsimile.
3
GOOGLE CONFIDENTIAL
IN WITNESS WHEREOF, the Parties have executed this Twenty-Sixth Amendment to the Existing Agreement.
AOL INC.
GOOGLE INC.
By:
/s/ Steven Quan
Name: Steven Quan
Title: VP, Business Development
/s/ Nikesh Arora

By:
Name: Nikesh Arora
Title: President, Global Sales and Business
Development
Google Inc.
Date: 2010.03.3
1 17:59:06
-0700
Date:
3/31/10
4
GOOGLE CONFIDENTIAL
Exhibit 10.11
January 29, 2010
Polar Capital Group, LLC
200 Portland Street, Suite 301
Boston, MA 02114
Attn: Donald Armstrong
Chief Strategy and Investment Officer
Polar News Company, LLC
200 Portland Street, Suite 301
Boston, MA 02114
Attn: Donald Armstrong
Chief Strategy and Investment Officer
Re: AOL Inc. (successor by assignment to AOL LLC) / Patch Media Corporation Merger Consideration and Accrued Interest Payable to
Ladies and Gentlemen:
Reference is hereby made to (i) that certain Agreement and Plan of Merger, dated as of May 30, 2009, by and among AOL Inc., a
Delaware corporation (successor by assignment to AOL LLC) ( Parent ), Pumpkin Merger Corporation, a Delaware corporation and a wholly
owned Subsidiary of Parent ( Merger Sub ), Patch Media Corporation, a Delaware corporation (the Company ), and Jon Brod, in his
capacity as the Stockholders Agent (as the same may be amended, supplemented, modified and/or restated from time to time, the Merger
Agreement ); (ii) that certain Letter Agreement, dated as of June 10, 2009, by and among Parent, Polar News Company, LLC ( Polar News )
and Polar Capital Group, LLCs ( Polar Capital ) (the Polar Capital Consideration Side Letter ); and (iii) that certain Letter Agreement,
dated as of August 5, 2009, by and among Parent, Polar News and Polar Capital (the Accrued Interest Side Letter ). Capitalized terms used
and not otherwise defined herein shall have the meaning ascribed to such terms in the Merger Agreement.
Parent, Polar Capital and Polar News agree that, notwithstanding the original terms of the Polar Capital Consideration Side Letter, the price
to be used for determining the number of shares of common stock, $0.01 par value per share, of Parent ( Parent Common Stock ), to be issued
to Polar Capital on the date hereof will be $23.525 (the average of the high and low trading prices of Parent Common Stock on the New York
Stock Exchange on December 10, 2009).
This letter is being delivered to document our mutual understanding regarding the implementation of the terms of the Polar Capital Side
Letter and the Accrued Interest Side Letter with respect to a portion of the Polar Capital Merger Consideration (as such term is defined in the
Polar Capital Consideration Side Letter). As of January 28, 2010, (i) the amount of Polar Capital Consideration (as such term is defined in the
Polar Capital Consideration Side Letter) due to Polar Capital will be $4,110,269.51 (the January 2010 Consideration Payment ), and (ii) the
amount of accrued interest due to Polar Capital under the terms of the Accrued Interest Side Letter will be $1,215.19 (the January 2010
Accrued Interest Payment ).
On January 29, 2010, after the close of trading on the New York Stock Exchange, Polar Capital will be issued 174,770 shares of Parent
Common Stock (the January 2010 Consideration Shares ) and
paid $20.45 in cash in lieu of a fractional share in lieu of the January 2010 Consideration Payment and the January 2010 Accrued Interest
Payment. Upon issuance of the January 2010 Consideration Shares and the $20.45 in lieu of a fractional share, Polar News or Polar Capital will
cease to have any claim of any nature whatsoever with respect to, and Parent shall have no further obligation of any nature whatsoever to pay,
the January 2010 Consideration Payment and the January 2010 Accrued Interest Payment.
2
Please indicate receipt of this letter agreement and acceptance of its terms and conditions by signing in the space provided below and
returning to Parent an original signed copy of this letter.
AOL INC.
By:
/s/ Ira H. Parker
Name: Ira H. Parker
Title: Executive Vice President and
General Counsel
Acknowledged and Agreed:
By:
/s/ Jon Brod
Name: Jon Brod
Title: Manager
Polar News Company, LLC
By:
/s/ Jon Brod
Name: Jon Brod
Title: Manager
3
Exhibit 31.1
CERTIFICATION
PURSUANT TO SECURITIES EXCHANGE ACT RULE 13a-14(a)
I, Timothy M. Armstrong, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 of AOL Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
5.
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is being prepared;
b.
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
c.
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants
most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrants internal control over financial reporting; and
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent
functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants
internal control over financial reporting.
Date: April 28, 2010
By:
/s/ Timothy M. Armstrong

Name: Timothy M. Armstrong
Title:
Chairman and Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION
PURSUANT TO SECURITIES EXCHANGE ACT RULE 13a-14(a)
I, Arthur Minson, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 of AOL Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
5.
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is being prepared;
b.
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
c.
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants
most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrants internal control over financial reporting; and
The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent
functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants
internal control over financial reporting.
By:
/s/ Arthur Minson

Name: Arthur Minson
Title:
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Exhibit 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 of AOL Inc. (the Company), as filed with
the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned officers of the Company certifies, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his respective knowledge:
1.
The Report fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of
the Company.
/s/ Timothy M. Armstrong

Timothy M. Armstrong
Chairman and Chief Executive Officer
(Principal Executive Officer)
/s/ Arthur Minson

Arthur Minson
Executive Vice President and Chief Financial Officer (Principal Financial
Officer)

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AOL INC.

Filed 04/28/10 for the Period Ending 03/31/10

(State or other jurisdiction of

(Address of principal executive offices)

Registrants telephone number, including area code: 212-652-6400

(Do not check if a smaller reporting company)

PART I. FINANCIAL INFORMATION

Cautionary Statement Concerning Forward-Looking Statements

Controls and Procedures

PART II. OTHER INFORMATION

Note 2: Income Per Common Share

Note 3: Business Acquisitions, Dispositions and Other Significant Transactions

Note 4: Income Taxes

Note 5: Stockholders Equity

Note 6: Equity-Based Compensation

Note 7: Restructuring Costs

Note 8: Commitments and Contingencies

Note 9: Segment Information

decreased liquidity in the capital markets;

our borrowing capacity under our revolving credit facility;

the impact of terrorist acts and hostilities;

changes in our plans, strategies and intentions;

our ability to attract and retain key employees;

the failure to meet earnings expectations.

Other loss, net

Investments and acquisitions, net of cash acquired

Principal payments on capital leases

See accompanying notes.

See accompanying notes.

Balance at December 31, 2008

See accompanying notes.

Revenues are attributed to countries based on the location of customers.

Recent Accounting Standards

Net income attributable to AOL Inc. common stockholders

NOTE 7RESTRUCTURING COSTS

Liability at December 31, 2009

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

Fifth Amendment to the CNN SSA, dated March 31, 2010.

/s/ Ken Gottesman

/s/ Theodore R. Cahall, Jr.

/s/ Steven Quan

/s/ Andy Blau

/s/ Steven Quan

/s/ Cyrus Beagley

/s/ Steven Quan

/s/ Kavata Mbondo

CNN INTERACTIVE GROUP, INC.

/s/ Steven Quan

/s/ Susan Grant

CNN INTERACTIVE GROUP, INC.

/s/ Steven Quan

/s/ Susan Grant

CNN INTERACTIVE GROUP, INC.

/s/ Steven Quan