AOL buys content engine Sphere

Still playing catch-up to Yahoo, Google and other rivals around attracting Web site visitors, AOL is now adding Web content engine Sphere to its growing list of acquisitions.

Before snapping up Sphere this week for an estimated $25 million, AOL had partnered with the Silicon Valley start-up anyway, using the company's widget-driven content search service for creating links from AOLnews.com and myAOL.com.

Soon after founding Sphere a couple of years ago, Sphere CEO Tony Conrad decided to gear the start-up to delivering "relevant" blog content to large news sites, signing up customers such as Time magazine.

"Back when we released the Sphere Related Content Widget in 2006, the response told us we'd tapped into a new phenomenon of openness. A bit of a perfect storm [hit] as the launch of our service coincided with publishers starting to embrace the virtues of linking to content outside their site as well as exploring ways to connect to the broader conversation happening in the blogosphere," Conrad wrote in his own blog this week.

Outside of its content search technology, Sphere offers a third-party network billed as containing more than 50,000 bloggers and other content publishers, who generate more than 2 billion article pages on the Web each month.

Despite AOL's much pricier buyout of social networking site Bebo last month, many of AOL's other recent acquisitions have fallen on the advertising rather than the content side.

These buyouts have included various constituent components of the company's emerging Platform-A advertising platform: textual ad platform Quigo, mobile ad platform Third Screen Media; and behavioral ad platform Tacoda.

Largely as a result of these earlier acquisitions, AOL seems to be making faster progress in industry rankings on the advertising side than anywhere else.

But while Platform-A now tops all of AOL's competitors with regard to reach, according to ComScore's figures, AOL has remained in fourth place for all of this year in terms of numbers of unique visitors to its Web sites.

For the months of January through March, AOL's Web site visitor statistics lagged behind those of Yahoo, Google, and Microsoft, in that order, with Fox Interactive landing in fifth place just as consistently. In fact, AOL's "unique visitor' figures actually dropped from about 109.4 million in January to 108.9 million in February, before rebounding in March to 111.8 million.

In contrast, industry leader Yahoo's visitor numbers steadily surged from 136.7 million in January, to 138.0 million in February, to 139.5 million in March.

But as Conrad has suggested, AOL is now in the process of "reinventing" itself in more areas than advertising alone.

"In the past year, we've watched AOL as a partner, move aggressively to build their audience (new services, new Web site that interacts with users, acquisitions in the community space) and their Platform-A advertising business, and they're making great progress on both fronts," according to Conrad.

"We think it's a huge advantage to become part of a suite of services that understands how Internet users access/consume content, and how to intelligently monetize in tandem with that content," Conrad wrote.