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AOL Buys Userplane To Expand IM Ad Network

The move is part of the company's shift to an ad-supported Web portal and away from its base of paid subscribers to its online communities.
AOL on Monday said it has acquired Userplane, a privately held company that lists MySpace.com as a customer for its chat and instant-messaging technology for online social networks, dating sites and other Web services.

AOL, a unit of Time Warner Inc., agreed to buy the Los Angeles-based company July 28 and closed the deal last week. Financial terms were not disclosed.

Userplane, founded in 2001 by Michael Jones, Nate Thelen and Javier Hall, provides IM and chat technology that's embedded in Web sites and online communities. The software is offered under three business models: a monthly licensing fee based on usage, an ad-supported model in which sites agree to let Userplane stream ads in return for getting the technology at no charge, and a hybrid model in which customers license the software and share in the ad revenues.

Userplane customers include MySpace.com, among the most popular online social-networks; Honda, Date.com, Spark, IGN, Tagged, Red Bull and Marvel Comics, AOL said.

AOL said this month that it would offer its paid Internet service, which serves as a proprietary Internet community for 10s of millions of dial-up subscribers, at no charge to broadband users. The move is part of the company's shift to an ad-supported Web portal that would compete with Yahoo and Microsoft MSN. AOL was forced to adopt the new model because of a steady decline in subscribers caused by an increasing number of people switching to broadband.

The acquisition of Userplane should help AOL expand its instant-messaging ad network.

AOL's AIM and ICQ services have 83 million users worldwide, and is the largest instant-messaging network in the United States. Many people using Userplane's software range from 18 to 35 years old, a favorite demographic among advertisers, AOL said.

Userplane, which has 12 employees, would remain in Los Angeles and operate as a wholly owned subsidiary of AOL. The acquisition was the third this year for AOL, which bought Lightningcast in May and Truveo in January.