If you equate great stocks with great companies, then you probably consider AOL one of the great tech companies of the last two years. Named the hottest tech stock of 2012, AOL has in the last year outperformed Google, Microsoft, and (of course) Apple, as you can see in the chart below ... [AOL is blue; Google in green; Microsoft in yellow; Apple in red]



But as AOL's earnings today show, the company remains the most confounding ostensibly "successful" tech firm of our time.



You probably know AOL as a conglomeration of websites that presumably make money by selling advertising next to their articles. But in fact, AOL as a media company is constant money-loser. It lost $17 million advertising on its fleet of sites -- AOL.com, Huffington Post, Moviefone -- in the first quarter of 2012 and another $5 million in the first three months of this year.

So, as a business proposition, AOL is a media company -- an ad company -- with diminishing losses. But as a profit-making business, AOL isn't a media company, or an advertising company, at all. It's a vestigial subscriptions business gleaning cash from people who haven't graduated from the era of pshhhkkkrrrrkakingkakingkakingtshchch*ding*ding*ding".