File picture

AOL said Thursday that shareholders re-elected all of its board members, rejecting a challenge from a hedge fund seeking a shakeup at the Internet and media group.

“Today's outcome reaffirms our strong belief that AOL has the right strategy and team to successfully execute on our plan to continue to deliver enhanced value for all stockholders,” the company said in a statement.

The vote was a setback for the Starboard Value hedge fund, with a large stake in AOL, which sought five seats on the board of directors and has criticised the strategy of the current management.

AOL earlier this year did carry out one of the demands of Starboard, which was the sale of more than 800 patents, a deal with Microsoft which brought in more than $1 billion.

Starboard said in a February letter to the AOL board it was “troubled that the company remains closed-minded to alternative value creation initiatives, and instead appears solely focused on pursuing the status quo.”

AOL has been struggling since the collapse of its leadership as an Internet subscription service, and has been seeking to become a more diversified Web firm. But it earned a profit of $21 million in the past quarter.

The company fused with news and entertainment giant Time Warner in 2001 at the height of the dotcom boom in what is seen as one of the most disastrous mergers ever. It was spun off by Time Warner in December 2009 into an independent company.

Under chief executive Tim Armstrong, AOL has invested heavily in online content, purchasing The Huffington Post and TechCrunch websites and putting money in local news network Patch.

AOL shares are close to their highest level since the 2009 spinoff. But shares fell 3.5 percent to 26.18 in morning trade. - Sapa-AFP