When AOL's Patch cut hundreds of employees and shuttered dozens of sites this summer, the hyperlocal news behemoth seemed headed towards the scrap heap.

But it may instead be moving towards a partnership, according to remarks made by AOL CEO Tim Armstrong at a UBS conference this morning.

"As an AOL investor, you should think about Patch 2014 and beyond as an asset with optionality for AOL. Most likely in a partnership scenario," Mr. Armstrong told a crowded room of investors and analysts. While the situation is subject to change in the next four weeks, Mr. Armstrong said, a partnership will probably be announced soon.

Partnering won't necessarily cure Patch's problems though. The New York Times tried partnering with CUNY's Graduate School of Journalism for its own hyperlocal effort, called "The Local," but eventually pulled out of the agreement. Mr. Armstrong provided no details about who the potential partner or partners might be.

Mr. Armstrong also claimed Patch's revenue had gone up since the restructuring, but profitability may be another story. "We are in a place right now where I would expect by the end of the year for us to have a solid plan on run rate profitability" he said. Mr. Armstrong tellingly did not claim Patch would be profitable by the end of the year, despite the combination of increased revenue and falling costs brought about by the layoffs.

Mr. Armstrong avoided any mention of the latest turbulence at Patch. In the past two weeks, reports surfaced that both its VP of editorial, Anthony Duignan-Cabrera, and co-founder, Jon Brod, are on their way out of AOL.