The company reported a second-quarter loss of $11.8 million, or 11 cents a share, compared with last year’s second-quarter loss of $1.06 billion, or $9.89 a share, which included a write-down of $1.41 billion. Revenue dropped 8 percent for the quarter, to $542 million from $592 million.

AOL did show a 5 percent increase in advertising revenue, to $319 million — its first increase in ad revenue since 2008. “AOL’s return to global advertising growth for the first time since 2008 reflects the hard work of our team and another meaningful comeback of the AOL brand,” Mr. Armstrong said in a statement.

Sales of display advertising increased 14 percent. Revenue from the company’s third-party advertising network, which sells digital ads across multiple Web sites, increased 29 percent, to almost $94 million. But the ad revenue was weaker than expected and investors reacted with surprising force on a day when the broader market rallied.

Analysts also said that investors were alarmed that AOL had ratcheted down expectations for future revenue based on a weak advertising market, despite its recent acquisitions of two prominent online destinations, The Huffington Post and Tech Crunch. Last month, AOL ousted Jeff Levick, who was the head of sales.

“Display ad revenue will be their main source of revenue,” said David Hallerman, principal analyst for eMarketer, “whether they are selling it on their own or selling it through their network.”

Analysts at eMarketer, a research firm, predicted that AOL’s share of United States display ad revenue would decline to 4.2 percent in 2011, from 4.8 percent in 2010 and 6.4 percent in 2009.

But David C. Joyce, a senior media analyst at Miller Tabak Company, said AOL was “smaller than its competitors but it’s growing faster” in display advertising. Mr. Joyce cited AOL’s Project Devil as one example of a potentially lucrative digital advertising business. Project Devil allows advertisers to have all the advertising spaces on a Web page for themselves.

The company also saw a 21 percent decrease in search revenue, to $87.8 million from $111.3 million. Subscription revenue declined 23 percent, to $201 million from $260 million, reflecting the continued decline of AOL’s Internet access business.

The company’s focus on content will be critical to its survival, Mr. Hallerman said. Since 2009, AOL has bought a dozen companies.

It acquired The Huffington Post, the news, aggregation and commentary Web site co-founded by Arianna Huffington, in February for $315 million and Tech Crunch, a technology news Web site, last year for an estimated $25 million.

It also acquired Patch, a network of 846 neighborhood-oriented news Web sites around the country, in 2009.

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