Shares of AOL (AOL) are up 1.75% Thursday, continuing their surge after Wednesday's better-than-expected​ earnings report. But the celebration may be premature.

For one thing, expectations for the New York company were lower than a snake's belly because the company has repeatedly disappointed investors ever since its 2009 separation from Time Warner (TWX).

The fourth-quarter results, while marking an improvement, were still lousy. Net income of $22.8 million, or 23 cents a share, fell 66% from $66.2 million, or 61 cents, a year earlier. Sales fell 3% to $576.8 million, its smallest decline in five years.

Some of the initiatives of CEO Tim Armstrong, such as Patch, remain a challenge. Business Insider estimated in December that the network of hyper-local sites would lose at least $100 million in 2011. In a conference call with reporters yesterday, Armstrong noted that some Patch sites were profitable last year though it wasn't clear how many. "We don't have a massive number of patches on a run-rate profitability, and some of them have bounced in and bounced out," Forbes quotes him as saying.

Then there's the traffic. Despite high-profile acquisitions of the Huffington Post and TechCrunch, the number of monthly unique visitors has remained flat. In December 2011, according to comScore, AOL had 107 million visitors, versus 111.9 million a year earlier.  Armstrong has argued that the traffic figures are misleading because they include "bad distribution deals" that "artificially pumped up" the numbers. 

Even with the recent run-up, shares of AOL are down more than 20% over the past five years. Armstrong still has to prove the skeptics wrong. (I continue to believe that AOL would do better as a privately held company.)  The improvements Armstrong has made still may not produce the consistent gains Wall Street demands.

Ironically, AOL's resurgence came during a quarter when investor favorite Google (GOOG) struggled. Some investors may wonder if the world has gone mad.

Jonathan Berr is a former AOL contract writer. He doesn't own shares of any of the listed companies.