SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 3)1

AOL Inc.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

00184X105

(CUSIP Number)

JEFFREY C. SMITH

STARBOARD VALUE LP

830 Third Avenue, 3rd Floor

New York, New York 10022

(212) 845-7977

STEVEN WOLOSKY, ESQ.

OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

April 10, 2012

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

_______________

1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 2,586,926
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 2,586,926
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,586,926
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.8%
14	TYPE OF REPORTING PERSON CO

2

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON STARBOARD VALUE AND OPPORTUNITY S LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 891,610
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 891,610
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 891,610
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1%
14	TYPE OF REPORTING PERSON OO

3

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON STARBOARD VALUE LP
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 4,916,000
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 4,916,000
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,916,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON PN

4

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON STARBOARD VALUE GP LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 4,916,000
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 4,916,000
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,916,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON OO

5

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON STARBOARD PRINCIPAL CO LP
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 4,916,000
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 4,916,000
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,916,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON PN

6

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON STARBOARD PRINCIPAL CO GP LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 4,916,000
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 4,916,000
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,916,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON OO

7

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON JEFFREY C. SMITH
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER 4,916,000
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER 4,916,000
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,916,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON IN

8

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON MARK R. MITCHELL
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER 4,916,000
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER 4,916,000
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,916,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON IN

9

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON PETER A. FELD
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER 4,916,000
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER 4,916,000
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,916,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON IN

10

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON RONALD S. EPSTEIN
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 850
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 850
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 850
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1%
14	TYPE OF REPORTING PERSON IN

11

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON STEVEN B. FINK
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 560
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 560
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 560
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1%
14	TYPE OF REPORTING PERSON IN

12

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON DENNIS A. MILLER
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 2,700
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 2,700
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,700
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1%
14	TYPE OF REPORTING PERSON IN

13

CUSIP NO. 00184X105

1	NAME OF REPORTING PERSON JAMES A. WARNER
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) o   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER 581
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER 581
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 581
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1%
14	TYPE OF REPORTING PERSON IN

14

CUSIP NO. 00184X105

The following constitutes Amendment No. 3 to the Schedule 13D filed by the undersigned (“Amendment No. 3”).  This Amendment No. 3 amends the Schedule 13D as specifically set forth herein.

Item 3. Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended to add the following:

The 560 Shares directly owned by Mr. Fink were purchased in the open market with personal funds and 60 of such Shares are held in an IRA account.  The aggregate purchase price of the Shares directly owned by Mr. Fink and not held in an IRA account is approximately $9,303, excluding brokerage commissions.

The 2,700 Shares directly owned by Mr. Miller were purchased in the open market with personal funds.  The aggregate purchase price of the Shares directly owned by Mr. Miller is approximately $49,628, including brokerage commissions.

Item 4. Purpose of Transaction.

Item 4 is hereby amended to add the following:

On April 10, 2012, Starboard Value delivered a letter to the Board of Directors of the Issuer (the “Board”) to communicate its views on the April 9, 2012 announcement involving the sale of more than 800 of the Issuer’s patents and their related patent applications to Microsoft Corporation. A copy of such letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.  In the letter, Starboard Value commended management and the Board for taking this meaningful first step in unlocking value for the Issuer’s shareholders, but noted that the announced sale of the patents does little to address Starboard Value’s serious concerns with the Issuer’s poor operating performance and substantial losses in the Display business.   Starboard Value estimated that the Issuer’s Display business is currently losing over $500 million per year, including $150 million in Patch alone, and stressed that it finds the Issuer’s continued commitment to the status quo in its Display business unacceptable.

Starboard Value further questioned the Issuer’s stated intention to return to shareholders only a “significant portion” rather than all of the proceeds from the patent sale.  In light of the Issuer’s dismal track record of capital allocation, Starboard Value expressed concern that shareholder capital will continue to be used for poorly conceived acquisitions and investments into money-losing initiatives like Patch and other Display properties.

Starboard Value said that there remains a substantial opportunity to unlock shareholder value at AOL, and Starboard Value desires to continue to be constructive and helpful in ensuring that the best interests of all shareholders are represented on the Board.  Starboard Value concluded by informing the Board that it remains willing to engage in a constructive dialogue regarding the qualifications of its nominees and a mutually agreeable resolution on board composition, which Starboard Value believes would be in the best interests of all shareholders.  

On April 10, 2012, the Reporting Persons filed with the Securities and Exchange Commission a preliminary proxy statement in connection with their solicitation of proxies for the election of three directors at the 2012 Annual Meeting of the Issuer.

15

CUSIP NO. 00184X105

Item 5. Interest in Securities of the Issuer.

Items 5(a)-(c) are hereby amended and restated to read as follows:

The aggregate percentage of Shares reported owned by each person named herein is based upon 93,105,844 Shares outstanding, as of April 2, 2012, which is the total number of Shares outstanding as reported in the Issuer’s Preliminary Proxy Statement for the 2012 annual meeting of shareholders of the Issuer filed with the Securities and Exchange Commission on April 5, 2012.

A. Starboard V&O Fund

(a) As of the close of business on April 10, 2012, Starboard V&O Fund beneficially owned 2,586,926Shares.

Percentage: Approximately 2.8%

(b) 1. Sole power to vote or direct vote: 2,586,926

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 2,586,926

4. Shared power to dispose or direct the disposition: 0

(c) Starboard V&O Fund has not entered into any transactions in the Shares since the filing of Amendment No. 2 to the Schedule 13D.

B. Starboard LLC

(a) As of the close of business on April 10, 2012, Starboard LLC beneficially owned 891,610Shares.

Percentage: Less than 1%

(b) 1. Sole power to vote or direct vote: 891,610

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 891,610

4. Shared power to dispose or direct the disposition: 0

(c) Starboard LLC has not entered into any transactions in the Shares since the filing of Amendment No. 2 to the Schedule 13D.

C. Starboard Value LP

(a) As of the close of business on April 10, 2012, 1,437,464 Shares were held in the Starboard Value LP Accounts.  Starboard Value LP, as the investment manager of Starboard V&O Fund and the Manager of Starboard LLC, may be deemed the beneficial owner of the (i) 2,586,926Shares owned by Starboard V&O Fund and (ii) 891,610 Shares owned by Starboard LLC.

Percentage: Approximately 5.3%

(b) 1. Sole power to vote or direct vote: 4,916,000

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 4,916,000

4. Shared power to dispose or direct the disposition: 0

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CUSIP NO. 00184X105

(c) Starboard Value LP has not entered into any transactions in the Shares since the filing of Amendment No. 2 to the Schedule 13D.

D. Starboard Value GP

(a) Starboard Value GP, as the general partner of Starboard Value LP, may be deemed the beneficial owner of the (i) 2,586,926Shares owned by Starboard V&O Fund, (ii) 891,610Shares owned by Starboard LLC and (iii) 1,437,464 Shares held in the Starboard Value LP Accounts.

Percentage: Approximately 5.3%

(b) 1. Sole power to vote or direct vote: 4,916,000

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 4,916,000

4. Shared power to dispose or direct the disposition: 0

(c) Starboard Value GP has not entered into any transactions in the Shares since the filing of Amendment No. 2 to the Schedule 13D.

E. Principal Co

(a) Principal Co, as a member of Starboard Value GP, may be deemed the beneficial owner of the (i) 2,586,926 Shares owned by Starboard V&O Fund, (ii) 891,610 Shares owned by Starboard LLC and (iii) 1,437,464 Shares held in the Starboard Value LP Accounts.

Percentage: Approximately 5.3%

(b) 1. Sole power to vote or direct vote: 4,916,000

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 4,916,000

4. Shared power to dispose or direct the disposition: 0

(c) Principal Co has not entered into any transactions in the Shares since the filing of Amendment No. 2 to the Schedule 13D.

F. Principal GP

(a) Principal GP, as the general partner of Principal Co, may be deemed the beneficial owner of the (i) 2,586,926 Shares owned by Starboard V&O Fund, (ii) 891,610Shares owned by Starboard LLC and (iii) 1,437,464Shares held in the Starboard Value LP Accounts.

Percentage: Approximately 5.3%

(b) 1. Sole power to vote or direct vote: 4,916,000

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 4,916,000

4. Shared power to dispose or direct the disposition: 0

17

CUSIP NO. 00184X105

(c) Principal GP has not entered into any transactions in the Shares since the filing of Amendment No. 2 to the Schedule 13D.

G. Messrs. Smith, Mitchell and Feld

(a) Each of Messrs. Smith, Mitchell and Feld, as a member of Principal GP and as a member of each of the Management Committee of Starboard Value GP and the Management Committee of Principal GP, may be deemed the beneficial owner of the (i) 2,586,926Shares owned by Starboard V&O Fund, (ii) 891,610Shares owned by Starboard LLC and (iii) 1,437,464Shares held in the Starboard Value LP Accounts.

Percentage: Approximately 5.3%

(b) 1. Sole power to vote or direct vote: 0

2. Shared power to vote or direct vote: 4,916,000

3. Sole power to dispose or direct the disposition: 0

4. Shared power to dispose or direct the disposition: 4,916,000

(c) None of Messrs. Smith, Mitchell or Feld has entered into any transactions in the Shares since the filing of Amendment No. 2 to the Schedule 13D.

H. Mr. Fink

(a) As of the close of business on April 10, 2012, Mr. Fink directly owned 560 Shares, of which 60 Shares are held in an IRA account.  Mr. Fink, as a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons.  Mr. Fink disclaims beneficial ownership of such Shares.

Percentage: Less than 1%

(b) 1. Sole power to vote or direct vote: 560

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 560

4. Shared power to dispose or direct the disposition: 0

(c) The transactions in the Shares by Mr. Fink since the filing of Amendment No. 2 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference.

I. Mr. Epstein

(a) As of the close of business on April 10, 2012, Mr. Epstein directly owned 850 Shares held in a certain trust.  Mr. Epstein, as a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Exchange Act, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons. Mr. Epstein disclaims beneficial ownership of such Shares.

Percentage: Less than 1%

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CUSIP NO. 00184X105

(b) 1. Sole power to vote or direct vote: 850

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 850

4. Shared power to dispose or direct the disposition: 0

(c) Mr. Epstein has not entered into any transactions in the Shares since the filing of Amendment No. 2 to the Schedule 13D.

J. Mr. Warner

(a) As of the close of business on April 10, 2012, Mr. Warner directly owned 581 Shares.  Mr. Warner, as a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Exchange Act, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons. Mr. Warner disclaims beneficial ownership of such Shares.

Percentage: Less than 1%

(b) 1. Sole power to vote or direct vote: 0

2. Shared power to vote or direct vote: 581

3. Sole power to dispose or direct the disposition: 0

4. Shared power to dispose or direct the disposition: 581

(c) Mr. Warner has not entered into any transactions in the Shares since the filing of Amendment No. 2 to the Schedule 13D.

K. Mr. Miller

(a) As of the close of business on April 10, 2012, Mr. Miller directly owned 2,700 Shares.  Mr. Miller as a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Exchange Act, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons.  Mr. Miller disclaims beneficial ownership of such Shares.

Percentage: Less than 1%

(b) 1. Sole power to vote or direct vote: 2,700

2. Shared power to vote or direct vote: 0

3. Sole power to dispose or direct the disposition: 2,700

4. Shared power to dispose or direct the disposition: 0

(c) The transactions in the Shares by Mr. Miller since the filing of Amendment No. 2 to the Schedule 13D are set forth in Schedule A and are incorporated herein by reference.

Item 7. Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following exhibit:

99.1 Letter to the Board, dated April 10, 2012.

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CUSIP NO. 00184X105

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated:  April 11, 2012

STARBOARD VALUE AND OPPORTUNITY MASTER FUND LTD By: Starboard Value LP,        its investment manager   STARBOARD VALUE AND OPPORTUNITY S LLC By: Starboard Value LP,        its manager   STARBOARD VALUE LP By: Starboard Value GP LLC,        its general partner STARBOARD VALUE GP LLC By: Starboard Principal Co LP,        its member   STARBOARD PRINCIPAL CO LP By: Starboard Principal Co GP LLC,        its general partner   STARBOARD PRINCIPAL CO GP LLC

By:	/s/ Jeffrey C. Smith
	Name:	Jeffrey C. Smith
	Title:	Authorized Signatory

/s/ Jeffrey C. Smith

JEFFREY C. SMITH

Individually and as attorney-in-fact for Mark R. Mitchell, Peter A. Feld, Ronald S. Epstein, Steven B. Fink, Dennis A. Miller and James A. Warner

20

CUSIP NO. 00184X105

SCHEDULE A

Transactions in the Shares Since the Filing of Amendment No. 2 to the Schedule 13D

Shares of Common Stock Purchased Price Per Share($) Date of Purchase

STEVEN B. FINK

500 18.6064 04/03/2012

DENNIS A. MILLER

2,700 18.3777 04/04/2012

EX-99.1

Exhibit 99.1

April 10, 2012

AOL Inc.

770 Broadway

New York, NY 10003

Attn: Members of the Board of Directors

To the Board of Directors,

Starboard Value LP, together with its affiliates ("Starboard"), currently owns approximately 5.3% of the outstanding shares of AOL Inc. ("AOL" or "the Company"), making us one of the Company's largest shareholders.  As you know, since December 21, 2011, we have voiced, both publicly and privately, our strong belief that the Company is significantly undervalued and that opportunities exist to create value based on actions within the control of management and the Board of Directors (the "Board"). 

We have been consistent in our view that AOL's portfolio of intellectual property is non-core, extremely valuable, and should be monetized.  On February 24, 2012, we sent a letter urging you to explore actions to monetize and unlock the value of AOL's portfolio of more than 800 patents.  We noted our belief that AOL's patent portfolio could produce in excess of $1 billion of licensing income if appropriately harvested and monetized.  On March 30, 2012, we wrote you a follow-up letter stressing that the Company should explore the monetization of the patent portfolio with a sense of urgency, and should carefully assess any asset sale or divestiture to ensure the most tax-efficient outcome.

We were pleased to read yesterday's announcement that AOL has entered into a definitive agreement to sell more than 800 of its patents and their related patent applications to Microsoft Corporation ("Microsoft") for aggregate proceeds of $1.056 billion in cash in a tax efficient manner.  The Company will also grant Microsoft a non-exclusive license to its retained portfolio of more than 300 patents and patent applications covering categories including advertising, search, social networking, content generation/management, and mapping, among others.  We commend management and the Board for taking this meaningful first step in unlocking value for AOL shareholders.  

However, the announced sale of the patents does little to address our serious concerns with the Company's poor operating performance and substantial losses in the Display business.  We estimate that AOL's Display business is currently losing over $500 million per year, including $150 million in Patch alone.  Patch is an unproven and, thus far, unsuccessful business model that is draining valuable resources from the Company.  Unfortunately, to date, management and the Board have been unable to meaningfully improve profitability in the Display business and unwilling to consider alternative strategies to realize value from these assets.  Conversely, recent public comments by management demonstrate that AOL remains committed to the status quo in its Display business - which we find unacceptable.

We believe when adjusted for the pro forma cash balance from the patent sale, AOL's enterprise value is only $1.14 billion as of the closing stock price on April 9, 2012. AOL generated consolidated EBITDA of $387.5 million in fiscal 2011. When excluding losses from the Display business, we estimate EBITDA would have been $932.5 million in fiscal 2011. This implies that, after considering the material increase in stock price and pro forma increase in cash, AOL currently trades at 2.9x Enterprise Value / Consolidated EBITDA or 1.2x Enterprise Value / EBITDA (excluding Display losses). This valuation does not include any additional value for AOL's Display properties, Company-owned real estate, or any further monetization of AOL's remaining intellectual property. The underperforming Display business appears to be substantially weighing down AOL's potential valuation.

Of additional concern is the potential future use of cash.  Pro forma for the patent sale, we estimate that AOL will have approximately $1.43 billion of cash, or $15.35 per share.  This represents more than half of the current market capitalization.  AOL has a dismal track record of capital allocation, having spent $2.3 billion on acquisitions since 1999 and recording a goodwill impairment charge of approximately $1.4 billion during 2010 alone.  Although management stated its intention to "return a significant portion of the proceeds to shareholders," we do not understand why the Company would only return a "significant portion."  Why wouldn't the Company simply return all of the proceeds?  We remain concerned that shareholder capital will continue to be used for poorly conceived acquisitions and investments into money-losing initiatives like Patch and other Display properties. 

Again, we applaud management and the Board for taking a big first step towards realizing the full value of AOL for the benefit of all shareholders.  We desire nothing more than to continue to be constructive and helpful in ensuring that the best interests of all shareholders are represented on the Board.  There remains a substantial opportunity to unlock shareholder value at AOL.  The announced sale of AOL's patents does not address the need for substantial improvement in the operating performance of the Company.     

As such, we intend to promptly file preliminary proxy materials with the Securities and Exchange Commission for the election of directors to the AOL Board at the upcoming 2012 Annual Meeting.  We remain willing to engage in a constructive dialogue regarding the qualifications of our nominees and a mutually agreeable resolution on board composition.  We believe this would be in the best interests of all shareholders.  

Best Regards,

Jeffrey C. Smith

Managing Member