CEO Tim Armstrong at AOL talks about the possible acquisitions

On the Call: AOL CEO Tim Armstrong

SAN FRANCISCO — AOL Inc., which separated from Time Warner Inc. late last year, has been trying to turn itself around, hoping to build its online advertising business as its legacy dial-up Internet service fades.

As part of this process, it has sold off several Web properties, including social networking site Bebo and instant messaging service ICQ. The company also has bought new ones, including Patch Media Corp. and Going Inc., which it picked up in June 2009 for less than $10 million each. Both companies build community-based Web sites. AOL CEO Tim Armstrong was an investor in Patch when it was acquired.

During a conference call with analysts Wednesday to discuss AOL’s second-quarter results, Armstrong discussed whether AOL could make other purchases.

QUESTION: Is there a point at which you would consider making larger acquisitions?

ANSWER: I think we are a build-first company in terms of trying to build things ourselves. I think we will do more M&A activity as we go forward, but I think it will be very targeted and tuck-in-level in the areas that we see successful, with the goal being consumer growth and advertiser growth in general.

One of the best things that happened at the company, actually, is that we are very connected to the startup community now, which we weren’t a year ago. We are very active in the AOL Ventures area, as well as very active in constantly discussing partnerships and M&A opportunities.