• Wall Street Journal, Thursday, November 8, 2007 11:45 AM

AOL on Wednesday completed the final piece in an ad network puzzle totaling $1 billion worth of acquisitions. The Time Warner company on Wednesday acquired Israel-based Quigo for an estimated $340 million, according to The Wall Street Journal, furthering its shift from a dial-up Internet service provider to an advertising services company. Quigo, a search and contextual advertising firm, is the fourth company AOL has bought this year and the third ad network. Mobile advertising firm Third Screen media and the behavioral targeting firm Tacoda are the other two.

Clearly, AOL's strategy is to become a giant digital advertising network. It's unclear whether the company's content business will slowly fall by the wayside or simply become another business unit, but the Web portal strategy is no longer its main goal. Its plan is to sell advertising on its own sites as well as those within its growing network, which is called Platform A. Quigo, Tacoda, Third Screen Media and Advertising.com are all being molded into the ad platform, which reaches 94 percent of the total U.S. online audience, according to comScore Media Metrix.

AOL has a lot to prove: the company's ad revenue grew just 13 percent in the last quarter, compared to a 38 percent drop in revenues from its lucrative but declining subscription business. However, the new strategy, which is only just underway, has yet to affect AOL's bottom line.

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