(Reuters) - AOL Inc (>> AOL, Inc.) Chief Executive Tim Armstrong's six year path to transforming the venerable dial-up Internet provider into a marketable mobile ad specialist was filled with bumps.

Armstrong spent hundreds of millions on the money-losing hyper local news site Patch. He presided over - or encouraged - the exit of a string of high level executives.

He was inadvertently recorded firing an employee in an audio clip that ricocheted around the Internet. Perhaps most infamously, Armstrong publicly blamed an AOL employee's "distressed baby" as the reason for the company's escalating health care costs.

But Armstrong appeared vindicated on Tuesday when Verizon agreed to pay $4.4 billion for the company, lauding the company for advertising technology and content for the mobile Web - areas Armstrong focussed on.

Verizon's offer - at a premium of more than 17 percent to AOL's close on Monday - is nearly double the price shares began trading six years ago, and roughly five times the nadir of August 2011.

"He has done a terrific job (for) shareholders," said one top AOL investor. "The challenge AOL has always had is it's so small it punched above it's weight in terms of audience and infrastructure. It's difficult to fight against the likes of Google."

Himself a former Google executive, Armstrong was tapped to lead AOL in 2009 as Time Warner Inc (>> Time Warner Inc) prepared to unwind the roughly $162 billion merger from nine years before, widely considered to be one of the most value-destructive in corporate history.

The key to his success in retrospect was a series of deals that put a company still heavily dependent on dial-up internet connections on the cutting edge of technology for placing ads.

Takeovers like video advertising platform Adap.tv, acquired for $405 million in 2013, gained AOL expertise in automating the process of buying and selling digital advertising.

Armstrong was one of the earliest advocates of “programmatic” ad platforms, essentially automating the process digital advertising in real time that is now fast becoming the main way ads are bought and sold.

"At the end of the day, Tim returned this business to growth, but not where the overall online advertising revenue growth is," said Ron Josey, an analyst with JMP Securities.

Overall U.S. digital adverting grew almost 18 percent in 2014, according to research firm eMarketer. AOL’s 2014 global advertising revenue increased 15 percent.

"Most shareholders are likely making money on this. What’s not to like?" Josey said. Armstrong himself is a big winner -- he is the 12th largest AOL shareholder, according to Thomson Reuters data.

Armstrong also picked a good time to sell, said Daniel Leal, digital media director at ad agency GSD&M, capitalizing on a moment of attention.

"It was one of the first players and one of the first established in digital and we tend to gravitate towards new offerings," he said.

Verizon insisted as part of the deal that Armstrong stay on board to run AOL's operations, a vote of confidence that will nonetheless require him to rein in his sometimes brash manner to avoid future bumps in the road.

(Additional reporting by Rodrigo Campos; Editing by Christian Plumb and Peter Henderson)

By Jennifer Saba