The timing of AOL's second quarter earnings report was not so good. On Tuesday, the Dow Jones U.S. Tech Index sunk by 5.8 percent--just slightly higher than the Dow Jones Industrial average drop of 5.6 percent--and AOL's stock sunk 6.4 percent. The earnings report happened to be the best AOL has seen in a while, but it still isn't great. The company lost $11.8 million in the second quarter, partly due to increased spending on its hyperlocal network Patch and "other strategic" investments. Revenue on the whole was down 8 percent to $542.2 million, but  AOL did finally see the signs of a turnaround in total advertising revenue, which rose 5 percent.

Chairman and CEO Tim Armstrong did his best to stay positive about the somewhat humdrum numbers, calling the report a "meaningful step forward." Indeed, compared to a year ago, this earnings report looks great. In the second quarter of 2010, AOL lost a whopping $1 billion, and the company hasn't seen a rise in advertising dollars since 2008. The company attributes the bump to the recent acquisitions of The Huffington Post and TechCrunch. Armstrong said, "AOL is singularly focused on becoming the next great media company for the digital age and we have positioned the Company’s best people, technology and assets in front of some of the largest opportunities on the internet."

But not everyone agrees that Armstrong's positive attitude will be enough to turn the company around. Don Reisinger at cnet calls it a "difficult quarter" for AOL, while Dan Lieberman at Deadline leads with the headline, "AOL Strikes Out." Meanwhile, Peter Kafka at AllThingsD finds it odd that Armstrong "swapped out his top ad guy last month" in light of the growth in that area, explaining that "AOL’s subscription revenue continues to dwindle away (though more than three million people are still paying it connect to the Internet) and the company is continuing to plow money into initiatives like its Patch local play." PaidContent's David Kaplan says, "There is still tremendous strain on AOL’s ability to make it all profitable, as the string of net losses continued, though it narrowed significantly." 

AOL's stock price has been sinking since it purchased The Huffington Post, a company that was on track to make $10 million in profits this year. It's down 36 percent this year alone. The fact that AOL has lost that much and a bit more this quarter alone bodes poorly for investors attitudes in a stock market full of bad attitudes.

Update (10:05 a.m. EST) Weighed down by the mixed earnings report, AOL shares dipped below $13 at the market's opening on Tuesday. This is the first time since the stock price has been so low since the company severed itself from Time Warner in 2009.

Update (3:25 p.m. EST) By Tuesday afternoon, AOL's stock price had bottomed out at $10.50 per share, a 30 percent drop from before the second quarter earning's statement. It recovered slightly in the last hour before trading and hovered just below $11 per share. Felix Salmon points out in a tweet that AOL's stock has fallen a whopping 45 percent since Arianna Huffington took flak for telling conference attendees on May 23, if they bought AOL stock then, they would "make a lot of money." She later apologized for the remark, which was in violation of SEC regulations.