America Online Inc. on Thursday said it has acquired privately held Xdrive Inc., a provider of online storage and backup services.

Financial terms were not disclosed.

Xdrive, based in Santa Monica, Calif., will operate as a wholly owned subsidiary of AOL, headquartered in Dulles, Va. The acquired company's management team and workforce of 34 employees will report to Gio Hunter, senior vice president of new business ventures at AO Digital Services.

"The digitization of consumer home media is skyrocketing, with consumers and AOL members increasingly looking for easier ways to protect and manage a wide variety of important data files and digital media assets," Hunt said. "Xdrive will further enhance AOL's consumer storage offerings to deliver a more safe and secure digital lifestyle for our members."

Xdrive is AOL's first major corporate acquisition this year, the Internet service provider said. The company bought online email service Mailblocks Inc. and marketing firm Advertising.com in the summer of 2004.

Xdrive offers online storage and backup services starting at $99.50 a year for 5GB. The service targets people looking to backup up digital assets, such as files, music, pictures and video.