In his attempts to reverse AOL's long decline, AOL Chief Executive Tim Armstrong is undaunted by his company's rivals, which have deeper pockets. His goal is to turn the company into a global digital media company with high-quality content.

PALO ALTO, Calif. — Tim Armstrong, AOL’s chief executive, will tell just about anyone who will listen that AOL is not some washed-up tech company from another era.

He says that after nearly a decade of stumbles, AOL is poised for a comeback.

When hundreds of employees crammed into the company cafeteria here heard that, they applauded.

But many had heard it before, from an ever-changing string of leaders when AOL was owned by Time Warner.

AOL split from Time Warner in December 2009.

It is different this time for the now-independent AOL, Armstrong says. “We’ve made a tremendous amount of difficult changes and reshaped what the company is doing and where it’s going,” Armstrong said later in an interview. “But I’m excited now about what the next phase is.”

Never mind that AOL’s business is steadily shrinking or that its rivals are bigger, healthier and have deeper pockets. Armstrong says he has not lost faith that his overhaul, now two years in the making, will eventually reverse AOL’s decline and turn the company into a global digital media company with high-quality content.

His biggest step was acquiring the Huffington Post, the news aggregation and commentary site co-founded by Arianna Huffington. He put Huffington, the political pundit turned blogger, in charge of all AOL’s content business.

He also replaced AOL’s management team, expanded the local news site Patch, retired myriad products and redesigned AOL’s home page to display advertising more effectively.

Last week, AOL said quarterly revenue from online display advertising grew 4 percent after more than three years of declines, a bright spot in an otherwise lackluster earnings report that showed continued deterioration in its business.

(In January 2010, AOL stock sat at $25.68. It closed Friday at $19.58.)

Armstrong said that was evidence that the emergency surgery on AOL was starting to pay off. But he acknowledged that it would probably take another two years before AOL’s overall business turned the corner.

The problem is, as it has been for nearly a decade, AOL’s dial-up Internet access business. The number of online subscribers has fallen to 3.6 million, from around 22 million at the time of the company’s disastrous mega-merger with Time Warner in 2000. AOL is losing 19,000 paying customers a week. Many of those who remain are either stuck in the habit of paying, do not need a faster connection or live beyond the reach of broadband.

Ross Sandler, an analyst for RBC Capital Markets, likened AOL to an oil well that was running out of crude. It remains profitable, but has a difficult future — even in the hands of Armstrong, who Sandler said was doing a credible job.

Armstrong’s colleagues credit him with maintaining a clear strategy for AOL, which had shifted direction over the years under three leaders in five years. Outsiders could not fathom the amount of change needed, said Jeff Levick, president of global advertising and strategy for AOL and one of Armstrong’s lieutenants at Google.

“The one thing that hasn’t changed is Tim’s vision for what AOL can turn into and should turn into and will turn into,” he said.