AFI BLOG: Media and Technology

Red Herring

AOL, continuing its campaign to transform from internet service provider ugly duckling to advertising network swan, has acquired contextual search firm Sphere, the companies announced Tuesday.

Financial terms were not disclosed. Shares of Time Warner, the parent of AOL, edged up $.02, or .1 percent, to $14.19 in early afternoon trading.

Three-year-old Sphere was backed by venture capital from Hearst Interactive, True Ventures and Trident Capital. Sphere launched as a blog search engine, but soon evolved into a provider of technology that helps third-party publishers embed links to related blogs, video, media, photos and advertisements via a pop-over window.

Time Warner reportedly has been holding talks about folding AOL into Yahoo in a deal that would give it a 20 percent stake in the combined company.
Red Herring

Prospects for that deal remain uncertain as Yahoo grapples with the $44.6 billion unsolicited takeover bid tendered by Microsoft in February. Yahoo management has been vying to accelerate the company’s earnings in a bid to remain independent and its quarterly results are scheduled to be released next week.

Clients of San Francisco-based Sphere include The Wall Street Journal, Time, Reuters, CNN.com and Washingtonpost.com.

On Monday, comScore announced that AOL’s “Platform-A” advertising network served ads to 170.5 million Internet users in March, the most of any online ad network. Following behind were Yahoo, with 160.3 million and Google with 152 million.

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