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AOL Acquires Web Startup Sphere

Last month it was Bebo, this month it's Sphere. Yep, AOL has reached into its pocketbook again to purchase yet another Web 2.0 startup. This time, the Time Warner company has come away with a content search engine whose technology adorns Web pages with links to articles, blog posts, and other related content. According to BoomTown's Kara Swisher, the sale was upwards of $25 million.

As usual, AOL's purchase is a win for the purchasee-that would be Sphere co-founder and CEO Tony Conrad-but it's unclear what, if any impact, the acquisition will have on AOL's flagging business, Swisher said. Like Truveo and Userplane before it, AOL has shown a knack for reeling in small and innovative companies, but it's also shown a frustrating inability to leverage them. With Sphere, AOL will once again face the considerable problem of holding onto top talent.

Regardless, Swisher calls Sphere a "complex and elegant" company that has forged solid relationships with major publishers across the Web, including Time Warner's Time.com and CNN.com. "It would be a shame for Sphere to fall into one of AOL's deep holes there," she said.

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