• by Gavin O'Malley  @mp_gavin, August 8, 2005

As part of its effort to offer users increased storage capabilities, America Online has purchased online storage and backup company Xdrive, Inc. for an undisclosed sum, AOL announced late last week. Xdrive's storage capabilities, which enable users to store and back up their computer files, music, pictures, and videos on Xdrive's servers, are expected to be integrated into AOL's services in the near future.

As the cost of storage has declined, AOL competitors Yahoo! and Google recently have offered users the opportunity to save more e-mails online. Yahoo! enlarged the size of its users' mail storage spaces from 250 megabytes to one gigabyte in late April, while Google offered one gigabyte of free storage to users of its Gmail service last spring. AOL itself recently re-launched its own Web site, and is offering free e-mail accounts with two gigabytes of storage to AOL Instant Messenger users.

Xdrive's management team, along with its 34 employees, will now report to Gio Hunt, senior vice president of new business ventures at America Online. The company will operate as a stand-alone, wholly owned subsidiary of AOL, and will continue to be based in Santa Monica, California.

Current and future subscribers of Xdrive will still have access to its full suite of services, in accordance with the Xdrive "Terms of Service" agreement.

Xdrive currently offers customers five gigabytes of storage for $9.95 per month.