In its first earnings report as an independent company, AOL posted a small profit for the fourth quarter. It recorded a net income of US$1.4 million, or 1 cent per share, for the quarter. In the same period a year ago, it lost $1.93 billion, because of a $2.2 billion noncash impairment charge.

Their revenue declined 17% to $809.7 million, down from $974.2 million from the same quarter a year ago — due to a drop-off in both subscription and advertising levels. Their subscription revenue dropped 28% to $307.4 million; advertising revenue dropped 8% to $471.6 million.

Display advertising in the U.S. rose 1% to $151.7 million, while outside the U.S. it fell to 22%. Search and contextual advertising fell 19% compared to the fourth quarter in 2008. AOL attributed this to a 27% drop in Internet subscribers who tend to use its search function more frequently.

Even though revenue fell year over year to $809.7 million, the number was actually better than what analysts had expected. Display advertising may have registered just a 1% increase, but it was the first time domestic display showed year-over-year revenue growth in eight quarters.

As a standalone company, AOL has laid out a number of goals for 2010, which include increasing its user base, launching a paid service platform, and completing a new search deal. Certainly, executives at the company are looking at the long term — and urging investors and advertisers to do so as well.