In Praise of AOL

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NEW YORK ( TheStreet) -- Tim Armstrong gets no respect as CEO of AOL (AOL) .

He came to his current job with the brightest of halos thanks to being head of sales at Google (GOOG) . Expectations for him to turn around the company were so sky-high his struggles ended up seeming more disappointing than they ever would have were his last name Smith -- or Falco.

Of course, Armstrong did nothing to damp those expectations, so he must assume some responsibility for his apparent fall from grace.

However, it's time to really give Tim Armstrong his due. He has done a fantastic job over the last two years in turning around the fortunes of AOL for its shareholders.

Just think, almost two years ago, AOL was in the post-IPO doldrums. It had gone public in late 2009 in the low $20s. By August 2011, it seemed like the wheels had fallen off. The stock dropped as low as $10 after a poor earnings report. At that point, and still today, you couldn't find anyone bullish on AOL. Heck, you couldn't find anyone neutral on the stock.

Back then, not only did it seem like earnings were slowing but you had the recent high-profile mass defections from TechCrunch and Arianna Huffington's apparent unhappiness after the acquisition of Huffington Post by AOL.

The culture of AOL seemed to be a mess. You had warring factions of longtime AOLers, new propeller heads from Google who had followed Armstrong, and the other newbies from HuffPo who believed they had been doing just fine on their own before they got absorbed into AOL. (Many of these folks had been hoping HuffPo would IPO instead of getting acquired.)

Investors seemed to want nothing to do with AOL. I remember some seemingly bright portfolio managers telling me AOL was a lost cause because they (the portfolio managers) never used it. Many couldn't believe there were still so many dial-up subscribers who continued to pay AOL full price for Internet access.

There was also a lot of criticism of Armstrong at this time (and I partook in some of that myself). The shine had come off Armstrong. Many concluded his past success was obviously due to the Google money machine and not his strong selling skills. Others pointed to his quixotic effort to keep pouring money into Patch, AOL's hyper-local website strategy that seemed (and still seems) doomed.

It wasn't lost on people that Patch had been an angel investment of Armstrong's before his arrival at AOL. Armstrong seemed to be throwing good money after bad on a pet project for which he still carried a torch.

Of course, later in November 2011 Armstrong, AOL and the board came under even more scrutiny when an activist investor started making noises about a proxy fight.