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aolBack in April, AOL (NYSE:AOL) scored $1.1 billion in a patent sale to Microsoft (NASDAQ:MSFT) — a move that certainly juiced up the stock price, eventually lifting AOL to its current 126% gains for 2012.

The plan is to return the windfall to shareholders with large stock buybacks. No doubt, this will provide stability for the stock price, but it won’t help long-term growth.

AOL’s core business remains weak. The company’s display ad business continues to feel pressure, especially from players like Facebook (NASDAQ:FB). The Patch local website platform is taking time to get traction. And the content properties — such as TechCrunch and Huffington Post — are seeing slowing traffic with growth at just 4% in the latest quarter.

Buybacks should keep AOL from plunging, but that’s the best you can expect — shares likely will meander without any catalyst to boost the stock.

Article printed from InvestorPlace Media,

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