NEW YORK (CNNMoney) -- AOL's decay is slowing. But is "less bad" good enough to count as a turnaround?
AOL's (AOL) fourth-quarter earnings of 23 cents per share beat Wall Street estimates, even though they slid 66% compared to last year. Revenue fell 3% to $576.8 million for the quarter that ended December 31.
The struggling company also posted declines for the full year. Revenue fell to $2.2 billion last year, down 9% from the $2.4 billion AOL pulled down in 2010.
But AOL cheered the result, noting that 2011 marked its the lowest rate of revenue decline in five years. Investors liked the report, too -- shares popped 10% in late trading.
The brightest spot was the advertising sector, where the company has struggled to regain the leadership spot it once held. Overall advertising revenue rose to $363.8 million last quarter, up 10% from the year-ago period.
Revenue for display ads, which are banners or other graphics, rose 15% for the fourth consecutive quarter of year-over-year growth.
On a post-earnings conference call with analysts, CEO Tim Armstrong called last quarter "strong" and something of a turning point for the company.
"The operational and structural changes we have made over the past two years are making a difference," Armstrong said.
Armstrong, a former Googler, took the AOL helm in March 2009. He's been busy buying up companies and trying to shed AOL's reputation as an outdated Internet portal. The splashiest purchase came last year, when AOL unloaded 40% of its cash to buy The Huffington Post.
As Armstrong buys up smaller companies, he's also deciding what content still fits into his vision for the new AOL. The company has been investing in sites like Patch, AOL's hyperlocal blog network, while unloading services including instant messenger ICQ.
It's all a far cry from 2001, when then-powerhouse AOL took over Time Warner in 2001 for $111 billion. By late 2009 -- when Time Warner (TWX, Fortune 500) (the parent company of CNNMoney) spun off AOL and unwound what's now considered one of the worst mergers in history -- AOL was worth only $3 billion.
By 2009, AOL's dial-up Internet subscriber base had dwindled, and it was merely an also-ran in Internet traffic and advertising -- behind competitors Google (GOOG, Fortune 500), Yahoo (YHOO, Fortune 500) and Microsoft (MSFT, Fortune 500).
Two of those three sectors -- search and dial-up -- remain in decline. Search revenue fell 8% last quarter, and the number of dial-up subscribers fell 15%. 
