Boy, it certainly seems that AOL has been on a buying spree lately. Could it be they are working to hedge their bets in other markets in case the whole ISP ends up folding in on itself?

NEW YORK (Reuters) - Time Warner Inc.’s AOL Internet unit on Thursday said it had purchased privately-held online advertising company Lightningcast in a bid to expand its Web ad network.

Lightningcast specializes in inserting video and audio advertising into video segments that air over high-speed Internet connections, including live programming, downloaded clips or on-demand viewing.

The company also helps advertisers develop Web video ads with interactive components, connecting viewers with more information on an advertiser should they select it.

“(Ad) agencies know that’s where the market is going,” said Tom MacIsaac, chief executive of Lightningcast. “Most video advertising (online) … is repurposed TV commercials, but it’s also a temporary state of affairs.”

Internet video ads represent a new growth area in the rapidly expanding $13 billion online ad industry, as a growing number of viewers tune in to television programs and other entertainment delivered on the Web.

Lightningcast will operate as a subsidiary of AOL’s Advertising.com unit. The company also sells and manages video advertising space on behalf of Web sites and combined with Advertising.com will work with a network that spans 300 Web sites, AOL said.

Financial terms were not disclosed. AOL has purchased 7 companies to bolster its online entertainment and advertising business since August 2005. Source: Reuters