In the past three years, newspaper circulation and advertising revenues have plummeted, a fourth of all newsroom employees have been laid off or have accepted buyouts, and more than a hundred free local papers have folded. During these unhappy times for the profession, a surprising savior has appeared: America Online. In the past year, AOL has hired nine hundred journalists, and each week it hires forty more. The new employees include alumni of the Times, the Wall Street Journal, National Journal, and USA Today. Other recruits are recent graduates of journalism schools, like Columbia’s, that used to send alumni to regional newspapers that no longer exist.

Tim Armstrong, AOL’s C.E.O., hired nine hundred journalists in 2010. Illustration by JOHN CUNEO

This surge in activity is even more noteworthy given AOL’s dismal decade. In the late nineties, the company built a business connecting people to the Internet over their phone lines and then giving them a place to check their e-mail, chat with friends, and scan the news. Roughly half of everyone logging on to the Internet did so through AOL. In 2000, the company bought Time Warner, in what was the biggest corporate merger in history. But soon thereafter people started getting faster Internet access through cable or DSL connections already built into their homes, the merger soured, and AOL’s business collapsed. In 2002, the company had thirty-five million subscribers; today, there are just over four million, and the number continues to decrease.

The company still gets eighty per cent of its profits from subscribers, many of whom are older people who have cable or DSL service but don’t realize that they need not pay an additional twenty-five dollars a month to get online and check their e-mail. “The dirty little secret,” a former AOL executive says, “is that seventy-five per cent of the people who subscribe to AOL’s dial-up service don’t need it.” But AOL also runs several popular service sites, like Instant Messaging, MapQuest, and Moviefone. According to the company’s newest C.E.O., Tim Armstrong, the most important part of AOL is the collection of blogs and news sites that it manages: DailyFinance, Engadget, FanHouse, Politics Daily, PopEater, and about ninety others. At the center of this media empire is AOL.com, the company’s home page, which provides links to these sites and which receives more than thirty-six million unique visitors every month.

Many companies publish content online, but Armstrong, who is forty years old, thinks that AOL can develop a reputation as a place where reporters and editors craft original stories. The Internet is chaotic, messy, and full of garbage, he says—and AOL can be a helpful filter. He talks enthusiastically about users opening their browsers and going to an uncluttered AOL.com home page, where they will find everything they want to read: from news about the flood in Australia and Verizon’s iPhone to gossip about the Kardashians and tips on cooking Chicken Marsala.

Two efforts are central to AOL’s success. The first is to revitalize its home page. This past summer, Armstrong launched a redesign effort and conducted daily meetings to make the page more alluring. “Is this the fastest place in the world to get news and entertainment?” he said, admonishing a roomful of executives. The home page, he told them, feels “like an Internet company designed it. I want it to feel more friendly.” The new home page débuted in November.

The second is to invest heavily in local news. “Local is the one area of the Internet that has not been built out in an extensive way,” Armstrong said last spring. “We believe it’s an untapped market, for the most part, and one of the largest commercial opportunities online that have yet to be won.”

AOL’s local effort is called Patch, a compendium of online newspapers that target small, affluent communities and are supported by advertising. Each paper offers a calendar of after-school activities and planning-board meetings, links to stories about breaking news, and a scrolling Twitter feed that includes information on traffic accidents, police logs, and ongoing crafts sales. There are now seven hundred Patch sites operating in nineteen states and the District of Columbia. AOL chooses new locations based on an algorithm that examines fifty-nine factors, including potential advertising revenue, income, voter turnout, and retail spending. Each Patch site is run by a journalist, who earns between forty and fifty thousand dollars a year. There are no offices; reporters live in the area they cover. Because there are no newsprint or shipping costs, AOL publishes news, Armstrong says, at approximately four per cent of what it costs a traditional local newspaper to do so. Still, the sites are not making money yet. “We will be the largest publisher of local news in the U.S. this year,” Armstrong predicts.

They might not, however, be the best. The sites aspire to break news, and occasionally they do. The Darien Patch, for example, reported that a First Selectman candidate had a criminal record. But often the sites are like digital Yellow Pages, promotional bulletin boards accompanied by news about all the fun things going on nearby. Quality varies widely, and one senses a tension between journalism, which often conveys uncomfortable news, and boosterism, which makes everyone feel good about the home town.

Quality is a problem for the entire AOL media empire. The company has hired many talented journalists, and some of the niche Web sites, like Engadget, publish content that particular readers love. Much of what AOL publishes, though, is piffle. On a typical day in January, its home page included a substantive story about the recovery of Representative Gabrielle Giffords after she was wounded in an assassination attempt in Tucson. But there were many more pieces with headlines like “KATIE AND TOM MAY BOYCOTT OSCARS,” “CURLED LASHES WITH NO MASCARA AT ALL,” and “VIDEOS: HILARIOUS PETS.”

In 1996, David Foster Wallace described the Internet as a place where “there are four trillion bits coming at you, 99 percent of them are shit, and it’s too much work to do triage to decide. So it’s very clear, very soon there’s gonna be an economic niche opening up for gatekeepers. . . . Because otherwise we’re gonna spend 95 percent of our time body-surfing through shit.”

Fifteen years later, there is still a need for the kind of filter that Armstrong says he wants to provide. If he can do it, the company may well be able to thrive as it continues to lose subscribers. It seems unlikely, however, that AOL will survive if it’s just creating new places to bodysurf.

After graduating from Connecticut College, where he majored in economics and sociology, Armstrong went to work at a mutual-fund company, but he quit after six months. For career direction, he cold-called senior business executives who he hoped might serve as mentors. None responded. One executive assistant told him, “The only way you’ll get through is if you’re a reporter, or if you know someone they know.”

“So I decided to start a newspaper,” Armstrong says. In late 1993, at the age of twenty-two, he and a friend from high school, Michael Dressler, sold their mountain bikes, racked up about a hundred thousand dollars in debt, and produced a tabloid-size newspaper called BIB (Beginnings in Boston). The paper was a tip sheet for college-age students and other people just entering the workforce. Armstrong and Dressler interviewed executives, who gave advice and told stories about how they had become successful. Suddenly, the higher-ups started returning calls, volunteering guidance, and offering the names of friends to contact.

Near the end of 1994, the owner of the Square Deal, a larger, rival newspaper, died. There was no obvious successor, and his widow called Armstrong. “My husband would have wanted you to run his newspaper,” she told him. He and Dressler were given partial ownership of the paper, and they moved its offices to Harvard Square and closed down BIB.

Armstrong was interested in a new phenomenon called the Internet, and he wondered if he and Dressler could publish a newspaper online. So he visited the M.I.T. campus to watch a presentation of Mosaic’s first browser. He saw that consumers could just click on what they wanted to read, and that advertisers could track users in order to target ads more precisely. “On the spot, I said, ‘I’m doing this,’ ” he recalled. “ ‘This is going to be huge.’ ”

Dressler wanted to enter the sports business, so they sold the Square Deal. Armstrong went to work as an ad-sales director for I-Way, which he describes as “the first Internet magazine for consumers.” He proved to be a persuasive ad salesman and was soon promoted. Two years later, he switched to a new online entertainment-and-news company, Starwave, which was bought by Disney in 1998. While there, he engineered the first million-dollar online-advertising deal, with the health-care company Columbia/HCA.

Armstrong moved through a series of online publishing jobs. In the summer of 2000, he was working in New York as the vice-president of sales and strategic partnerships at a news-and-gaming company called Snowball. One day, a friend called and told him that Google was considering selling ads to run alongside search results. Its sales and operations chief, Omid Kordestani, would be in New York and wanted to meet Armstrong for an “informational discussion.” They got together at the Regency Hotel and, at the end of their conversation, Kordestani asked Armstrong if he’d fly to California to meet Google’s co-founders, Sergey Brin and Larry Page. They offered him a job as U.S. sales chief, and he accepted after convincing them that he should be stationed in New York.

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Armstrong did bold things at Google. At one point, he decided to expose Google’s engineers to the consumer-oriented culture of Procter & Gamble. That company’s chief marketing officer, Jim Stengel, wanted his staff to learn about digital technology. So they agreed to exchange employees for a few weeks at a time. Armstrong’s main accomplishment was to build a direct-sales force of more than a thousand employees, who worked with advertisers and their agencies. Most of the company’s revenues were generated by the small text ads that appear when it answers search queries on Google.com. But Armstrong helped convince Google that much of its future revenue would come from people who could sell large display ads on other sites in the company’s empire, like YouTube. He “literally built the entire direct sales force” at Google, the company’s C.E.O., Eric Schmidt, wrote in an e-mail. “He is a genuinely fun and charismatic leader, people just like to be with him and listen to him. He is among the best and most inspirational sales managers I have ever worked with.”