The internet company's revenues fell 23% to $664.3m as it looked to position itself away from its ISP roots towards an advertising-funded online content company.
Advertising revenue and subscription revenues dropped 19% and 28% respectively.
AOL claims operating expenses declined by $139m compared with the same quarter in 2009. To make the cuts AOL has embarked on winding down operations in continental Europe, reducing headcount by 2,500 staff and closing or selling non-core businesses.
The company today confirmed it has agreed to sell its instant messaging service ICQ to Digital Sky Technologies, the Russian internet company which is an investor in Facebook.
ICQ is the leading instant messaging service in Russia and has a significant presence in Germany, the Czech Republic and Israel.
AOL originally bought Mirabilis, the Israeli developer of ICQ, in 1998 for $407m.
According to ComScore data from February, ICQ has more than 32 million unique visitors per month.
Tim Armstrong, chairman and chief executive officer at AOL, said: "We wish ICQ great success as a part of DST and will be rooting for them going forward."
There was no update on the strategic review of Bebo, which AOL has said will complete by the end of May. It will close down the social network if it cannot find a buyer.
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