Time Warner's AOL has acquired Goowy, San Diego-based flash widget startup for an undisclosed sum. Widgetized versions of AOL properties could be the next step for the dinosaur ISP.

AOL as an ISP has been on the decline for years, but has been taking measures to establish itself as a stronger player in the advertising market.

Goowy, a tiny, six-employee outfit which currently has partnerships with Brightcove, Veoh, MTV, VH1, and Red Bull, hosts and syndicates widgets developed on its own yourminis platform. AOL has expressed the desire to integrate Goowy's technology into their Platform A advertising network.

Platform A is AOL's consolidated advertising network which includes its advertising properties: Advertising.com, Tacoda, Third Screen Media, Lightningcast, and AdTech. AOL's Senior Vice President of Social Media, Messaging and Homepages David Liu says Platform A will soon be launching "significant new advertising products" built upon Goowy's widget platform.

Goowy also has its own Software-as-a-Service (SaaS) suite called Goowy Webtop similar to Microsoft's Office Live and Google's Apps which saw a flare up in media coverage last year. However, despite the promise these application suites show, a survey from NPD illustrated just how abysmal the rates of adoption really have been.