Mr. Armstrong’s big dream had become a nightmare that wore out his shareholders and set off a proxy fight in 2012. The hedge fund Starboard Value L.P. ran for three seats on AOL’s board, saying it did not believe Patch was a “viable business.”

The insurgents lost the war, but turned out to be right. Mr. Armstrong was able to keep the peace with other AOL investors in part by engineering a $1.1 billion sale of AOL patents to Microsoft and returning much of that value to the shareholders, but the additional time — or was it rope? — that he secured did not change the outcome at Patch.

Analysts who follow the company are less interested in Patch than in Mr. Armstrong’s management of the broader enterprise, and several I spoke to give him high marks, even counting Patch.

“He has been very transparent,” said Benjamin Schachter, a media analyst at the Macquarie Group. “He made it clear to investors that Patch was going to take a lot of resources to make this business work, that there were significant challenges. While it has been clear that it has been very difficult for him — he really wanted it to work — he told investors he would make the necessary cuts if it didn’t and now he is.”

As a graduate of the Google school of dreaming big — when he worked there, Mr. Armstrong helped expand a sales force that clobbered much of the rest of the media economy — Mr. Armstrong is nothing if not a true believer. Even though Patch is being dismantled or perhaps sold off to various partners, he still believes that he had the right product in the right space, and that he just ran out of runway.

That runway ended because of a schedule he set. In May 2012, he promised restive investors on an earnings call that he would make Patch profitable by the end of 2013. That page of the calendar arrives this month while profitability remains on a far shore, so Mr. Armstrong is reluctantly throwing in the towel.

“At the end of the day, could Patch have been run better? We don’t know,” he said. “We were doing this while we navigated turning around the rest of the company. Patch was one of the big bets that we made, among others, and I still believe local will be a big opportunity whether it is Patch or someone else.”