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What Does AOL See In Sphere?

"I'm starting to wonder if AOL is getting a little giddy about acquisitions," said The New York Times' Saul Hansell. Sphere, the Time Warner company's latest acquisition, which an executive tells him sold for around $25 million, helps bloggers and other publishers provide links to contextually relevant Web content. In other words, it supplies widgets-some simple, some not so simple-for Web publishers.

Hansell points out that there's no obvious moneymaker behind Sphere, a service that's usually provided to publishers for free. Sphere's business model is to sell a single ad that appears in related pop-up content that users may or may not see. It wasn't selling many of those single ads, Hansell said. AOL's bright idea is that better targeting will help those ads become more effective and more attractive to advertisers. There's also the opportunity to use Sphere to drive users to more AOL content, executives said.

This could be problematic, Hansell said, because Sphere is supposed to be an objective service. If too much AOL content starts showing up in Sphere results, then publishers will quickly drop it.

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