AOL, the world's largest Internet services provider, said Thursday it would buy online marketing firm Advertising.com for $435 million in a deal, in a vote of confidence for the once-anemic market for online advertising.
America Online, a unit of Time Warner Inc., said the all-cash transaction will allow the company to reach more than 140 million Internet users, and to better target and measure the effectiveness of online advertising.
"Online advertising is showing very strong growth across the industry, and the acquisition of Advertising.com underscores AOL's determination to strengthen its competitive position," said Jonathan Miller, Chairman and CEO of America Online Inc.
Advertising.com acquires and manages ad inventory for Web sites, search engines and e-mail publishers, working with 800 advertisers to serve specific ads based on their marketing objectives.
AOL, which lost 2.2 million Internet access subscribers in 2003, is broadening its business to rely less on Internet access and more on advertising and consumer services like bill paying and online dating.
Media buyer Universal McCann recently forecast Internet advertising would grow 20 percent to $6.78 billion in 2004.